Upgrading VMware Update Manager to version 5.0 Update 1 fails while updating SQL Express instance

Upgrading VMware Update Manager 4.x or 5.0 to VMware Update Manager 5.0 Update 1 fails.The setup fails while updating the SQL Server Express instance.
The installed version of SQL Server Express is 10.50.2500.0, which is the same as the redistributable version bundled with vSphere 5.0 Update 1.
This can be checked with SQL Management Studio. Right-click the SQL Server instance and select Properties to verify the version.
This issue can occur if the version information for SQL Server Express in the registry is incorrect. The vSphere installer checks this registry key and compares it to the version string of the bundled SQL Express setup:
HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\Microsoft SQL Server\VIM_SQLEXP\MSSQLServer\CurrentVersion
If these version strings do not match, the vSphere installer will attempt to upgrade the database even though the database version is already up to date.
To resolve this issue run regedit and navigate to:
HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\Microsoft SQL Server\VIM_SQLEXP\MSSQLServer\CurrentVersion
Change the value of the key to match the version string of the redistributable Microsoft SQL Express installer. For example, the version string is 10.50.2500.0 for SQL 2008 R2 SP1 Express.
Click OK and close the Registry Editor.
Update VMware Update Manager again to verify.
For more information read the following article from VMware KB