Well, I thought I had it figured out, sorta. As I last posted, when my SBS install would not recognize the floppy drive when it needed to install the SCSI drivers, I thought letting it use the Windows drivers was a good idea. Unfortunately those drivers were not compatible as evidenced by my Windows Server 2003 install continuing to Blue Screen and reboot. When I finally figured out how to get it to stop and display the blue screen instead of going right into a reboot (an F8 option!), it appeared to be a problem with the SCSI driver. So much for the Windows driver. But the problem still remained. How to get the system to recognize the floppy at the proper time. I Googled and found an interesting post, USB floppy drives during Windows Server 2003 R2 setup. This pretty much told me what I had to do, add a line to the driver txtsetup.oem file to define the USB floppy drive. Figuring out exactly what that line should contain and where is should be located was a bit of a challenge however. When a USB device is installed, such as a floppy, there is a registry entry made for it. Included in this entry is the 'Hardware ID'. The line for the txtsetup.oem file is basically this ID.
I found the appropriate ID in the HKEY_LOCAL_Machine\SYSTEM\CurrentControlSet\Enum\USB area. Go there and then do a Find for the manufacturer of your floppy drive. Mine is a Sony. Here I found my ID to be "USB\VID_054C&PID_002C&REV_0703". It actually had two lines in the registry. I found using just the first was sufficient. Following the ID it appears you need to add the service, "usbstor".
The final line I added was
id = "USB\VID_054C&PID_002C&REV_0703", "usbstor"
I added it under the section that listed the drivers for Windows 2003. When I ran the install and hit F6, it asked me for the floppy as always, and read it fine as always. But during the rest of the install, it didn't bother me to insert the floppy. I'm guessing the added line gave it enough info to not need to ask me to hit Enter since the floppy was on-line.
My install seems to have worked. The server is not blue screening nor rebooting. I'll finish installing tomorrow.