You don't need Connect to use the Reader; all you need it for is to buy DRM-protected content from the Connect Store.
There are a number of approaches to using the Reader without Connect:
1. Copy books directly to a memory stick or SD card, and put that in the Reader.
2. Use alternate software such as the freeware "libprs500" (I think that's the right name - someone will correct me if I'm wrong). This runs on Windows, Mac OSX and Linux, and can be used to copy files from a PC to the Reader. You'll find download links on the Wiki page.
Hope that's of some help to you. Not trying to "get" at you - I'm sure that if Connect doesn't install on Windows Server 2003 there has to be some underlying reason for that. Is it the latest Connect v1.1 that you're trying to install?
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