I am experiencing a similar issue where my attempt to upgrade to v 5 of KNM is resulting in a 'Not Responding' installer dialog. I've let it run for almost and hour with no progress being made. My CPU utilization is also at 100%. Was there a solution to the original posters issue?
[2013:04:01 15:38:56] - Kaseya Network Monitor Build 9220 installation starting.
[2013:04:01 15:38:56] - Using path c:\knm\
[2013:04:01 15:38:56] - Installing KNM server
[2013:04:01 15:38:56] - Checking if Kaseya Network Monitor is installed and running.
[2013:04:01 15:38:56] - Kaseya Network Monitor is running on this machine, please shutdown before running installer
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[2013:04:01 15:39:29] - Kaseya Network Monitor Build 9220 installation starting.
[2013:04:01 15:39:29] - Using path c:\knm\
[2013:04:01 15:39:29] - Installing KNM server
[2013:04:01 15:39:29] - Checking if Kaseya Network Monitor is installed and running.
[2013:04:01 15:39:29] - Checking if Kaseya Record Manager is installed and running.
[2013:04:01 15:39:29] - Kaseya Record Manager not installed.
[2013:04:01 15:39:29] - Checking if port 8080 is busy.
[2013:04:01 15:39:29] - Checking if port 8080 is open in firewall.
[2013:04:01 15:39:30] - Checking for a license file and if the license is valid.
[2013:04:01 15:39:30] - Preparing for update, using directory c:\knm\1364845170\
[2013:04:01 15:39:30] - Copying file c:\knm\1364845170\db_support\intl\fbintl.conf (6 KB).
[2013:04:01 15:39:31] - Copying file c:\knm\1364845170\nmservice.exe (15873 KB).
[2013:04:01 15:39:31] - Copying file c:\knm\1364845170\icuin30.dll (408 KB).
[2013:04:01 15:39:31] - Copying file c:\knm\1364845170\resource\logmsg_lang.dat (61 KB).
[2013:04:01 15:39:31] - Copying file c:\knm\1364845170\resource\resource_lang.dat (927 KB).
[2013:04:01 15:39:32] - Copying file c:\knm\1364845170\msvcr80.dll (612 KB).
[2013:04:01 15:39:32] - Copying file c:\knm\1364845170\db_support\firebird.msg (145 KB).
[2013:04:01 15:39:32] - Copying file c:\knm\1364845170\db_support\intl\fbintl.dll (900 KB).
[2013:04:01 15:39:32] - Copying file c:\knm\1364845170\msvcp80.dll (536 KB).
[2013:04:01 15:39:32] - Copying file c:\knm\1364845170\eventlogmsg.dll (2 KB).
[2013:04:01 15:39:33] - Copying file c:\knm\1364845170\icuuc30.dll (660 KB).
[2013:04:01 15:39:33] - Copying file c:\knm\1364845170\fbclient.dll (3696 KB).
[2013:04:01 15:39:33] - Copying file c:\knm\1364845170\icudt30.dll (1532 KB).
[2013:04:01 15:39:33] - Copying file c:\knm\1364845170\firebird.conf (0 KB).
[2013:04:01 15:39:34] - Spawning c:\knm\1364845170\nmservice.exe
[2013:04:01 15:39:40] - Current version is 4.1.8892
[2013:04:01 15:39:41] - Checking if configuration can be upgraded to v5
[2013:04:01 15:39:41] - Spawning c:\knm\1364845170\nmservice.exe
[2013:04:01 15:39:46] - Can upgrade, version is 4.1.8892
[2013:04:01 15:39:46] - Performing upgrade to v5 in path c:\knm\1364845170\