If you have Spore, you should reformat your HDD first.  I would have had no issues whatsoever, if I didn't have the Spore Creature Creator on my machine.  Unfortunately, SP3 tried to update a portion of the registry that was locked by <Spore's DRM - I forget the name>.  It caused the SP3 update to fail, and XP went into a slow death spiral.
I hadn't intended this as an anti-DRM post, but I guess it ended up that way.  The point was be careful if you have Spore or anything else that locks the registry.  Otherwise, the SP3 update should be pretty smooth.