I was recently upgrading a production server to R2 and it turned out to be a fairly frustrating, and in the end unsuccessful experience. This was the Standard Edition. The installer popped a message and said that the system needed to be rebooted due to some leftover files from the previous install. After I clicked OK, the install continued. Not what I would've expected. At the end I got a warning that the upgrade failed. I rebooted and examined the server, all the shared components and Management Studio were upgraded to R2, the engine and everything else remained 2008. When I ran the install after that, the rule check failed and the install wouldn't continue. This was the detailed message:
Rule "Previous Upgrade" failed. A previous upgrade that failed was detected. To retry the upgrade, remove the upgraded feature that failed, and then run the upgrade again.
It is not exactly clear what they mean by that. Browsing back in the installer, all the features that needed to be upgraded were selected and grayed out, you couldn't uncheck any of them. If they mean that you should uninstall all the features that now cannot upgrade, it is no longer upgrade, at that point you are reinstalling. And if I uninstall a 2008 feature and then reinstall it, in my opinion that would be risky because God knows how the 2008 installer will do since an R2 install was already run on the machine. So in the end, I detached the databases, scripted out the logins, uninstalled the entire SQL Server and started from scratch.
This BTW is the third time a 2008 to R2 upgrade failed at my company. I didn't do the other upgrades so I don't have the details. But as a precaution, I would highly recommend that you treat the upgrade as a potential failure, and be prepared to reinstall your SQL Server and recreate all the databases and settings.