Nevermind got 7.5.6 and sitebuilder 2.05 working just fine on the same server.
My I recommend you rewrite your documentation. This took me 5 times to get right and it was not easy or intuitive.
I installed 2003 server, then plesk 7.5.6 without the sitebuilder 1.2
Installed MSSQL, and SP3
Finally, installed sitebuilder 2.05. The configuration is misleading and needs more definition but its working flawlessly.
Its only time... and whats time? MONEY
NOTE: at the time to PUBLISH (step 5), the "Web Site Name" refers to the the Site Host Name that should be configured under "Site Management" and "Publish Properties" tab.
If anyone wants more details instructions, let me know (or screencaps)