I have multiple Windows agents that are being launched as services.
When I updated Jenkins from 1.495 to 1.506, all the slaves died - they just failed to launch, even though they did it without issues during regular Jenkins restarts.
In order to bring the agents back to life, I had to remove the services from each Windows host ("sc delete jenkinsslave..."), manually remove the agent directory (containing the .jars and .exe), and then create the service from scratch.
If I skip any of the described steps, the agent fails to launch.
Agents are running Windows 2003 Server and Windows 2008 Server, the behavior is identical.