We have just set up an Application Compatibility Lab using our product AOK. Unlike many earlier Service Packs the findings are pretty good. Results on http://www.changebase.com/docs/AOK-XPSP3-study.pdf
If you are interested,
If you have a problem application we would be happy to test it and try and fix it for you free of charge - and publish the results on this forum. john.tate@changebase.com

I've been having the same issues over and over again when installing SP3.

First I do a clean XP install and run Windows Update (WU from now on), which installs a couple of updates.

The next time round WU only shows one update available, SP3, which I install. After that it's impossible to install any of the 8-9 updates that become available after the SP3 installation (it is possible to download and install them manually, but in the long run it's a pain).

The only way I've been able to repair this is by uninstalling SP3, running WU which strangely lets you install those 8-9 post-SP3 updates (probably because they have been downloaded), and then running WU again which will install SP3.

From this point on, everything runs smooth with updates being installed flawlessly.

This hasn't only happened on my computer, but on every single computer I've been building.

There must be an easier way of doing things (integrating SP3 on the XP CD?).

My workload in just going to increase when clients start calling me in to repair their systems after the automatic update kicks in...

Still a joke:
Complete format and fresh install.
Intel board and cpu. Downloaded the latest version. BAM wouldn't let me install any other updates.
All failed .
Uninstaled SP3. Everything downloaded and worked great after that.

Considering SP3 seems to contain mostly previously released updates and rollups I can't see this being much of a hiccup for most. I've since installed SP3 on over 60 machines with no issues so far. Here's hoping anyhow...

Just figured i'd mention, to wait on Diablo 3 to have XP installed, you might as well just get whatever new windows will be out in 2015... cuz its going to be a LOOOOONG wait :D

After installing SP3, interent devices on my desktop vanished. And I have onboard LAN, extra ethernet card and wireless card. Not one of them is detected. Even after reverting back to SP2, the same situation continues. Since I use windows only for gaming, tt sucks badly because I can't connect to steam, no multiplayer option. And I have to reboot to linux if I want to find some online help when stuck in a game. I will wait for Diablo-3 for xp reinstallation

Disable anti-virus program

.... of course Windows is THE virus

As the famous philosopher Pogo once said, "We have met the enemy and he is us".

Or maybe a better quote from the Vietnam war, "We going to save those people if we have to kill them to do it".