I've achieved some success... A couple things to point out:
After 5 attempts to use the upgrade wizard in IE8, I decided to try Google chrome. Interestingly enough, I got a different result (a yellow box appeared with a warning about permissions.) More interesting, I then went back to IE and it too gave me the warning.
One thing I screwed up was that I had moved the database directory - as recommended - to another location. However, the default database directory must stay even if moving the database itself to another location.
I also may have had some permission issues. I use Plesk v9 and it uses IWPD_XXX in addition to IUSR_XXX. From what I've read, it's the IWPD account that is being used and not IUSR and I've confirmed this with other apps. For some reason, WWF seems to run under IUSR...
I admit there is probably some user error involved, but I thought I'd point out what I experienced.