WSUS with SQL Authentication
Microsoft says only Windows Authentication will work when using a remote SQL Server, I found a solution to make SQL Authentication works !!
You need to modify some values under the following registry key:
SqlAuthenticationMode = SqlAuthentication
SqlServerName = yourSQLServerName
SqlDatabaseName = yourDatabaseName
SqlUserName = YourSQLUserName
The SqlEncryptedPassword value should be generated using the EncryptionUtilities.EncryptString function from the Microsoft.UpdateServices.Internal namespace located into the microsoft.updateservices.common.dll located into the C:\Program Files\Update Services\service\bin folder of your WSUS Server.
If you're not a developer and want to obtain the EncryptedPassword in an easy way, just download the utility from here: EncryptString.zip