I've created 2 workspaces with SPsp1 and can view both fine through
any version browser yet when I check the event logs I notice an error
saying "The server was unable to add the virtual root '/NAME/' for
the directory "\\backofficestorage\localhost\SharePoint Portal
Server\workspaces\NAME' due to the following error: The system cannot
find the path specified.

Going into the IIS manager I also notice those spaces have error
icons associated with them. Directory security settings look fine.
Could this have something to do with the need to create virtual
directories? I've tried that to no luck.