The current farm uses database from the following SQL server(s) whose versions are not supported.

 

While upgrading from MOSS 2007 to SharePoint 2010, you might get the following error-

 

The current farm uses database from the follwoing SQL server(s) whose versions are not supported. SharePoint requires these SQL server(s) to be upgraded to minimum supported version before you can continue. Refer to the log file of this configuration wizard for more information about the minimum supported SQL versions and download instructions.

 

To fix this you need to install cumulative updates for SQL Server 2008 SP1
http://support.microsoft.com/kb/970315