10.6.3 issues
It sounds like there are different variations of 10.6.3 update issues. I was running 10.6.2 and updated via Software Update. Granted, there were other updates included, but I did get the update error and was not able to boot since the update. I tried all options I could think of (including PRAM zap, safe mode (via Shift), verbose (command-v), single user (command-s), booting from the SL DVD and repairing permissions and disk via disk utility - no issues found). I even booted from the snow leopard DVD and reinstalled 10.6 (over the existing installation - not clean install). None worked. I still was not able to pass the apple logo.
Unfortunately my last back-up was 2 weeks old. So, I ended up booting in firewire target disk mode and backing up all my drive into an external drive from an old powerbook. I did a clean install (yes, erased the partition) and migrated my backup. Then did the 10.6.3 combo update (downloaded from apple.com - not software update) and did the full software update. Now it works fine. No issues found so far.
This is the first time I had issues with software update. I think with 10.6.3 Apple cut some corners on testing certain configurations. Next time, I'll make sure to do a full backup just before the update.
I ended up not losing anything (except several hours of troubleshooting and restore) - but it was very annoying.