I'm running 8/07 on multiple machines and SMC works just fine... I've had patches before that broke WBEM on earlier versions of Solaris though, so it wouldn't shock me if there was a bug somewhere.

I looked at the link you supplied and I don't see how that in any way supports the theory that 8/07 itself is buggy. It may very well BE buggy in some way, but the link that you're using as "proof" really doesn't prove anything. The only thing of interest there at all is the difference between the 2 machines in regards to the startup services. If you've read the update notes, you'll notice that Sun is gradually phasing out the legacy /etc/rc.d style stuff for the more modern svcs style. Therefore, the differences seen are very easily explained by patch level.

Of course, none of this helps you any...

My experience has been that backing out the last set of WBEM & SAA patches, then applying the very latest solved the issue when I ran into it.

Based on the link you posted, you are not, as Dox Systems - Brian already pointed out.

Ok,

Nextime I will choose DEFAULT OR FULL PACKAGE INSTALL and maybe that will do the trick.
Until then....I will just have to create users (which I did already) manually from the terminal console.

But from time to time I will look into this when I have more time...

reinstall - read everything at docs.sun.com - that is my answer -