I’ve never had luck getting Windows 7 computers to add themeselves to a SBS 2003 domain using SBS 2003’s ConnectComputer tool. I’ve tried it at three or four of our clients more than a dozen times and everytime I’ve run into the problem where the __sbs_netsetup__ account doesn’t logout and restart; you’re forced to perform the logout and restart yourself. Upon rebooting, the computer’s name hasn’t changed and when trying to log on, you get the “The trust relationship between this workstation and the primary domain failed.”
I’ve found the suggestion about adding the “service principal name” using adsiedit, and tried it, but it didn’t help; I still received trust-related error messages when attempting to log on.
While I don’t like it either, I’ve resorted to adding these computers to the domain manually. And you know what? The world hasn’t ended 🙂 So while I don’t have a solution, I hope you find some comfort in knowing that you’re not alone.