After upgrading my SMS 2003 SP2 site to SCCM 2007 SP1 the “SMS_SQL_MONITOR” service would fail to start stating Error 2: Cannot find the specified file.
I finally figured out (by stumbling across the website below) that this service is an SMS 2003 service only and is not required for SCCM. Apparently this is a bug in the Setup that doesn’t remove this service for you..
*I should also note that I verified that this service does not exists in my clean install of SCCM in my Lab.
Instructions on removing this service here: