sharepoint search is not working

I have an issue with SharePoint search.

The situation

The server is installed with SharePoint on a farm with 2 servers. A new app pool is created and that app pool is using a domain account called moss_service. moss_service is set to be in the administrator group in both server. moss_service is also set to be the db_creator in the content database. When I checked it initially, the search's default content access account is using another different account, I changed that to be using moss_service account. I didn't do IIS reset because this is a production server, they dont want frequent iis reset. Strangely, checking the services.msc under "office sharepoint server search" the account is still using an old one. (and apparently it's only running on 1 server, the other server is not running) I then change that to the following: domain\moss_service with the password.

and then I rerun the crawl.

How do I diagnose the issue

Basically everytime I change something I restart the crawl and then check the event viewer. Multiple things come out but the following is the major ones:

The start address cannot be crawled. The password for the content access account cannot be decrypted because it was stored with different credentials. Re-type the password for the account used to crawl this content. (0x80042406)

Performance monitoring cannot be initialized for the gatherer object, because the counters are not loaded or the shared memory object cannot be opened. This only affects availability of the perfmon counters. Restart the computer.

Access is denied. Check that the Default Content Access Account has access to this content, or add a crawl rule to crawl this content. (0x80041205)

Crawl Logs Result

The crawl log is showing this:

The password for the content access account cannot be decrypted because it was stored with different credentials. Re-type the password for the account used to crawl this content.

I tried changing it again at service.mstsc and the rerun the full crawl again but then it doesn't work. I have tried entering it using the following way:

moss_service@domain.local

and

domain\moss_service

My Questions are:

How do I fix this? Is this the right way to setup the search? Does the search account has to be using a different domain account? Seemed like one fix complicates the other, how do I set this right? Is it worth it to upgrade to sp2?

Typically the crawl account is different from your service account. The best practices documents for the crawl account say that it MUST NOT be a member of your farm administrators group, and should not be an administrator on the server.

Here are links to the best practices documents from microsoft:

http://technet.microsoft.com/en-us/library/cc263445.aspx

http://go.microsoft.com/fwlink/?LinkID=92883&clcid=0x409

And a link for the proper way to change the account name/password: http://support.microsoft.com/kb/934838