Windows XP SP3 installation may fail with the error code 0×80070005 and/or one of the following errors
Service Pack 3 setup error. Access is denied.
Service Pack 3 setup error. Service Pack installation did not complete
This is very likely a restricted registry permission in the Windows Registry. This could be caused an application like Antivius software which changs the System Access Control lists (SACL) causing this issue.
To quickly identify if it really is a registry permission issue check the
C:\Windows\Svcpack.log (or %windir%\Svcpack.log) for something similar to the following lines
Access is denied.
Message displayed to the user: Access is denied