I just created a test box to test our upgrade to version 9, but I did it a little differently. This is what I did that worked very well. I wanted to create an exact replica of our live version 8 box to do a true test of the upgrade.
1. Installed SQL server 2000 with the same exact specs as live server
2. Transferred the GP databases following the detailed instructions in Knowledge base article 878449 (How to transfer an existing MS …..)
3. Installed GP v8 and all 3rd party products
4. Followed all of the preparation steps recommended in the MS – Microsoft Dynamics GP Upgrade instructions.
5. After completing Part 1 of the upgrade instructions, Preparation, I backed up the databases on the test server. That way, if I needed to run through the upgrade again, I would not have to run through the preparation piece again, just restore these databases. I also exported all of my modified forms and reports. It did not say this in the instructions, but I also found that everything ran smoother if I deleted all of the current logins. (Tools -> Setup -> User Activity).
6. I then ran through the upgrade process as outlined in the document.
I received errors on 2 of my 7 companies on the first try. I was able to restore the tables I had backed up and run the upgrade again. I documented everything I did to resolve the errors and then would run the upgrade again. On the 3rd try it went perfectly. I now have documented the changes I need to make to the live server to ensure that the upgrade goes smoothly. I did not upgrade to SQL 2005, but all of the Microsoft documentation I have read, recommends you upgrade to GP 9 and then upgrade to SQL 2005.
Hope this helps.