Procedure to follow
1) Download and then install the Subinacl.exe file from here
2) Start Notepad
Copy and then paste the following text into Notepad.
cd /d "%ProgramFiles%\Windows Resource Kits\Tools"
subinacl /subkeyreg HKEY_LOCAL_MACHINE /grant=administrators=f /grant=system=f
subinacl /subkeyreg HKEY_CURRENT_USER /grant=administrators=f /grant=system=f
subinacl /subkeyreg HKEY_CLASSES_ROOT /grant=administrators=f /grant=system=f
subinacl /subdirectories %SystemDrive% /grant=administrators=f /grant=system=f
subinacl /subdirectories %windir%\*.* /grant=administrators=f /grant=system=f
secedit /configure /cfg %windir%\repair\secsetup.inf /db secsetup.sdb /verbose
3) Save this file as sp3fix.bat
Double-click the sp3fix.bat file to run the script.
Note This script file may take a long time to run. You must run this script as an administrator.
After completing the above script you can Install Windows XP SP3.
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nice..
This also fixes access denied errors when installing sp2, you beautiful person! (^_^)