While the installation of the XP SP3 upgrade has went well for me and it should for most users.  A service pack represents a major upgrade of operating system or product binaries and should be performed in a cautious manner. 

It's important to read an research all pre-requisites prior to installing.  For example, in testing Internet Explorer 8 beta, I discovered it must uninstalled, then apply the XP SP3 upgrade, and then IE 8 beta was reinstalled.  

Internet Explorer Prerequisites - A must read for XP SP3
http://blogs.msdn.com/ie/archive/2008/05/05/ie-and-xpsp3.aspx

Excellent resource for Windows
http://www.wilderssecurity.com/showthread.php?t=208460

Microsoft Forums - XP SP3 issues
http://forums.microsoft.com/TechNet/ShowForum.aspx?ForumID=2010&SiteID=17