I have a published toolbox that is using conditional execution in one of its models:
This works fine in ArcGIS Desktop 10.0, and each sub model\script works fine when run separately from this model via the geoprocessing service. It appears that ArcGIS Server does not like having a nonassigned model parameter. When this model is run via a geoprocessing service, ArcGIS Server sends a Invalid return value error regarding the first dataset of the branch that does not execute.
I could move the conditional branch to the client or to a middle wrapping web service instead. However, I would like to keep the client side execution of this as simple as possible. Has anyone here run into this problem or know of a workaround that doesn't require a separate web service or conditional logic in the client?