Note To upgrade from a Microsoft® SQL Server™ version 7.0 active/active failover cluster (or any configuration where SQL Server exists on the second node), you must first convert one side of the failover cluster to a named instance of SQL Server 2000.
To upgrade from a SQL Server 7.0 active/active failover cluster
You must install the binaries to a local drive and use a cluster disk for the data. This local drive is a path, which is a non-clustered disk valid on all nodes of the cluster. This drive on all nodes of the cluster must have at least 300 megabytes (MB) of available space.
For more information, see How to upgrade from a default instance to a default clustered instance of SQL Server 2000 (SQL Server Setup).
Note Optionally, you could create two named instances of SQL Server 2000 and use the Copy Database Wizard to upgrade both SQL Server 7.0 installations to a clustered, named instance of SQL Server 2000. This will provide better consistency, because all references to clustered installations of SQL Server 2000 will be in the form VirtualServer\Instance, rather than sometimes being just the servername, and sometimes both the servername and instancename.