It was reported in Microsoft Knowledge Base Article 951403 that "Spyware Doctor 5.5 or earlier versions of Spyware Doctor may cause Windows XP Service Pack 3 to stop responding when you try to install or to uninstall the service pack". Fortunately, the solution only requires disabling Spyware Doctor 5.5 (or earlier versions) during the install or uninstall process of Windows XP SP3.
Once again, the reminder to see the instructions at Recommendations before you install Windows XP Service Pack 3 before installing SP3 or, for that matter, making any major system change. Another good read is Harry Waldron's instructions in Windows XP SP3 - Read all prerequisites for a successful installation.
Considering the headaches with a damaged install, isn't it worth the extra time to prepare first?