When installing Windows XP SP3, yoou may be faced with error code 0x87FF054F “Internal error occured”. This can happen, if the Windows Automatic Update service is disabled. Could also be a problem with the “Background Intelligent transfer Service”.
To resolve the problem,
1. Click Start – Run – type “Services.msc” and press Enter.
2. Look for “Automatic Update” service and check if it is started. If it is not started then right-click and select “Start” to start the service.
3. Also, set the service to Automatic by right-click – properties. Under startup type, select “Automatic”.
4. Click Apply & OK.
Repeat the above for the “Background Intelligent transfer Service”.
Now, try to restart the installation and check if it helps!