I had this issue and solved it by doing the following:
SYMPTOMS
When you use the Add/Remove Programs tool to remove SharePoint Portal Server and Windows SharePoint Services from your server, you may receive the following error message in a SPSADM.EXE – Common Language Runtime Debugging Services dialog box:
Application has generated an exception that cannot be handled.

Process id=0xb60 (2912), Thread id=0x1dc (476)

Click OK to terminate the application.
Click CANCEL to debug the application.
Additionally, you may receive the following error message in a Microsoft Office SharePoint Portal Server 2003 Setup dialog box:
Installation ended prematurely because of an error.
CAUSE
This issue occurs if you do not remove SharePoint Portal Server and Windows SharePoint Services in the correct order. This issue occurs if you remove Windows SharePoint Services before you remove SharePoint Portal Server from the server.

To fully remove SharePoint Portal Server from the server, you must remove the programs in the following order:
SharePoint Portal Server
Windows SharePoint Services
Microsoft SQL Server Desktop Engine (MSDE), if it is installed on the server
WORKAROUND
To recover a server where SharePoint Portal Server and Windows SharePoint Services are not removed in the correct order:
Log on to the server as a member of the local Administrators group.
Click Start, and then click Run.
In the Open box, type cmd, and then click OK.
Switch to the drive where SharePoint Portal Server is installed.
Type the following line, where CDimage is the path of the shared folder that contains the SharePoint Portal Server CD files, and then press ENTER:
msiexec /qb /i <CDimage>WSSSts.msi /L*v <full path>STS_Install.log LAUNCHEDFROMSETUPSTS=1

Switch to the drive where Windows is installed.
Type the following line, and then press ENTER:
cd %programfiles%Common FilesMicrosoft SharedWeb Server Extensions60Config

Type the following line, and then press ENTER:
copy Web.config Web.config.bak

Type the following line, where CDimage is the path of the shared folder that contains the SharePoint Portal Server CD files, and then press ENTER:
msiexec /qb /I <CDimage>SPSSps.msi /L*v <full path>SPS_Binary_Upgrade.log REBOOT=ReallySuppress

Type the following line, where CDimage is the path of the shared folder that contains the SharePoint Portal Server files, and then press ENTER:
msiexec /qb /famsv <CDimage>SPSSps.msi /L*v <full path>SPS_Repair.log REBOOT=ReallySuppress DONTSTARTSERVICE=1

When Setup completes and you are prompted to restart the server, click No.
Use the Add/Remove Programs tool to remove SharePoint Portal Server, Windows SharePoint Services, and MSDE (if it is installed on the server).

Important Make sure that you remove the programs in this exact order.
To avoid this issue when you remove SharePoint Portal Server from the server, use the Add/Remove Programs tool to remove the programs in the following order:
SharePoint Portal Server
Windows SharePoint Services
MSDE (if it is installed on the server)
STATUS
Microsoft has confirmed that this is a problem in the Microsoft products that are listed at the beginning of this article.