Verified answer

I would suggest that you perform a Windows System Restore – choose a restore point prior to the attempted install of SP2

START | type rstui ~

Edit : here is more to look at. Open the Windows Update troubleshooter by clicking the Start button Picture of the Start button, and then clicking Control Panel. In the search box, type troubleshooter, and then click Troubleshooting. Under System and Security, click Fix problems with Windows Update.

Honestly, I suggest your start over. Install XP and begin from the start.

Why are you using such an old OS. Microsoft has stopped supporting it. You could try Linux Mint, PClinuxOS, or openSUSE (11.3 is coming out in a few weeks and will be awesome).

The first 2 are geared for new users and I am sure you can easily figure them out. You can run most of the popular windows software in wine. I do it all the time. (winehq.org then appdb to check to see if your stuff runs in linux).

either service pack 2 is already installed, the copy of windows is bogus or service pack 3 is installed. one of the three.

Open control panel, find system and open it and see if it is already installed. It should install if you have XP Home Edition, but if you have XP Professional it is already installed. Your Anti virus programs may also be interfering with the installation of it.