If you log into your server using e.g. Remote Desktop, then click Start , right click My Computer and select Properties , you will see that it reports "Service Pack 2", even if you've updated your server to Power Pack 3. The Windows Home Server console, however, reports that you have Power Pack 3 installed.
This is because Windows Home Server is based on a version of Windows Server 2003. When you view the server's Properties, you see the patch level for this operating system. Windows Home Server is this operating system, plus a set of tools and applications; only those tools and applications will know the patch level for the system as a whole. Since Windows Home Server is not designed to be used as a desktop operating system, you should ignore the patch level reported when you log in to the desktop.I'm not on the WHS team, I just post a lot. :)