Out of the box, the Canon Powershot software is not not compatible with Windows 2003 Server. But with some tweaking, you can make it work.
First, you need to install SSDP and UPnP services for Win2k3.
Next, make sure that the old Canon software is uninstalled.
Then, set the startup.exe install program on your Canon driver CD to load in WindowsXP compatibility mode. Run setup, and install ZoomBrowser ex, and photo stitch. I've found that version 5.8 does not run well under Win2k3, but that 6.x works fine, so at this point you may need to download and install an updater from Canon's website.
After rebooting, plug your camera in. The Canon software may load automatically. I found that I had to first open the Windows Control Panel for Cameras and Scanners and set Camera Window as the default action when my camera was plugged in.
After doing this the Canon software would load when I connected the camera, but clicking on the download images button did not work. A final step that I had to complete was to open the E:\Program Files\Canon\CameraWindow\CameraWindowDVC6 folder, and set all the EXE files to WindowsXP compatibility mode. I'm not sure this is necessary, since I discovered that some of the files had been set into Win2k compatibility mode from when I had been trying other methods to get the CameraWindow software to work. Win2k mode definitely doesn't work.
After those steps the Canon software works flawlessly. I can download pictures just fine, and all the Canon photo tools work just fine. In the MS event viewer tool, I do see the following, rather ugly message a lot, but I've never seen any actual malfunction:
Generate Activation Context failed for c:\Program Files\Canon\ZoomBrowser EX\Program\MFC80U.DLL. Reference error message: The referenced assembly is not installed on your system.