Well... I know exactly what this error means but it's past the 45 minute mark, so I'm assuming you've bailed on the upgrade and restored from backup.
Looks like somewhere along the line your installation account was removed from IIS account list... you're being denied access to create new virtual applications for the web interface (2.4.6 adds a couple new directories under InetPub\wwwroot directory for these).
to add you install account (I'm assuming this is NT 4.0 here) go to start | program files | Administration Tools | Microsoft NT 4.0 Option Pack | Microsoft Transaction Server and open the Transaction Server explorer.
Once there just expande the tree a few nodes and in the process you should see an error dialog pop up saying that the current account isn't added to some such list and it'll ask you if you want to add it back. Go ahead and do that, re run the upgrade and you should go all the way through.
This is a known Microsoft problem where the transaction server corrupts somehow or another on occasion. This is the only way to get around it that I know of.
Jeff Lindborg
Unity Product Architect/Answer Monkey
Cisco Systems
lindborg@cisco.com
http://www.AnswerMonkey.net (new page for Unity support tools and scripts)