Just as a follow up to close out this. I had uninstalled and reinstalled SQL2008 SP1 which gave me the same result. Finally I just uninstalled and...

Tried your script and received the same result. It is just like the server isn't recognizing the flag is enabled for "Database Mail XPs"

I have tried it via the GUI as well and get the same error.

Enabling the broker requires exclusive rights to the database.

Put MSDB in single-user mode and then fire the command:

ALTER DATABASE [msdb] SET ENABLE_BROKER