Server is fully back online now. Just to summarise the steps i followed for anyone else in the future.
Environment: SBS 2003
Process:
Step 1 - Create a new VM that will be used as the BE Server. I found that if i installed it on the server i'm recoverying it would have problems after restoring system state.
Step 2 - Install a clean version of SBS 2003 but stop once it loads Windows and the desktop (you do not want to go through the wizard).
Step 3 - Install the RAWS on the SBS 2003 Server.
Step 4 - Restore all files and folders to the SBS 2003 Server.
Step 5 - Restore System State to the SBS 2003 Server.
Step 6 - Reboot and the the SBS should be back online.
Step 7 - Restore Exchange 2003 Databases and make sure they mount successfully
Step 8 - For each sql instance, find the folder where the database got restored and rename the master$4idr to master.mdf, and masterlog.ird to masterlog.ldf. Do the same for Model.
Step 9 - Go into Services.msc and start each of the sql services.
Step 10 - Once this is done you should be able to restore the sql databases through Backup exec.
Step 11 - Restore all of the sharepoint content.
Hopefully after doing that the SBS should be back online! The moral of the story is to make sure that SDR is enabled and it would have saved a bunch of time and effort!!
If anyone needs assistance with this let me know and i'll do my best to help out. I'm no expert but know what its like going through the process and how stressful it is.
Thanks again sasha for your help too.