I did an install of RHEL3 Update 1 and skipped RHN registration in firstboot. 
After rebooting, I registered the machine with RHN but did not apply any errata.
 Then I went to the RHN web UI and scheduled all relevant errata to be sent to
the machine.  Then I ran rhn_check on the client.

It installed many errata and then tracebacked at the following point:

Installing...
   1:up2date                ########################################### [100%]
   2:up2date-gnome          ########################################### [100%]
New Up2date available
Traceback (most recent call last):
  File "/usr/sbin/rhn_check", line 332, in ?
    try:
  File "/usr/sbin/rhn_check", line 209, in handle_action
     
  File "/usr/sbin/rhn_check", line 164, in run_action
    except:
  File "/usr/sbin/rhn_check", line 92, in do_call
     
  File "/usr/share/rhn/actions/errata.py", line 58, in update
    return packages.update(packagelist)
  File "/usr/share/rhn/actions/packages.py", line 357, in update
    # run the method, but move all the exception catching
  File "/usr/share/rhn/actions/packages.py", line 193, in _catchErrors
     
  File "/usr/share/rhn/actions/packages.py", line 396, in batchRun
    if pkgList:
  File "wrapper.py", line 1085, in batchRun
up2date_client.up2dateErrors.Up2dateNeedsUpdateError


Now I cannot open the RPM database.  I assume that removing the __db.00* files
in /var/lib/rpm will fix that, but I want to understand what went wrong in the
first place.