The Windows Server Update Services (WSUS), also packaged in Small Business Server, enables the dynamic compression module in IIS that breaks 32bit application pools.

"This is because of the XPress compression scheme module (suscomp.dll) which gets installed with WSUS. Since Compression schemes are defined globally and try to load in every application Pool, it will result in this error when 64bit version of suscomp.dll attempts to load in an application pool which is running in 32bit mode."

Execute following command with administrator permissions in order disable the XPress compression scheme:
%windir%\system32\inetsrv\appcmd.exe set config -section:system.webServer/httpCompression /-[name='xpress']

For more information see: