Service Packs are collections of security updates and stability enhancements from Microsoft. For Windows XP, every new Service Pack includes all fixes from previous Service Pack so that you don't need to download and install them one by one. Just grab the latest one and you're good. 
Service Pack 3 is the last service pack for Windows XP because XP is really old by now. Remember, XP was launched in 2001?
How do I know which Service Pack I have on my computer?
Right-click My Computer icon on Desktop or in Start menu and choose Properties. Or use Windows Key+Break keyboard shortcut.
Open General tab and see what's written in the System section.
If you have Service Pack 1 or Service Pack 2 or no line about Service Pack at all, continue reading this article. Close System Properties window by clicking OK.
If you already have Service Pack 3 installed, you can safely skip this article.
Before installing Windows XP Service Pack 3, please follow steps in the following articles - otherwise the installation might fail because of some trivial reason such as messed up files on system drive or not enough free space on disk, or some malware blocking installation:
- Check disks in Windows;
- Free up disk space in Windows (you need 1500 megabytes [1.5 gigabytes] of free space to install Windows XP Service Pack 3);
- Full anti-virus scan, such as avast! Free Antivirus on-demand scan or Microsoft Security Essentials on-demand scan;
- Full anti-malware scan, such as Malwarebytes' Anti-Malware on-demand scan;
- Optionally, create a disk image backup, as described in the Configure EaseUS Todo Backup Free in Windows article.
Installing Service Pack 3 using Microsoft Update
First, close all open programs and documents.
If you do not have Microsoft Update or Windows Update open, begin by clicking Start button or pressing WINDOWS KEY, open All Programs and choose Microsoft Update or Windows Update.
Alternatively, if you already have Internet Explorer open, open Tools or Safety menu and click Windows Update.
First Microsoft Update searches for updates to itself.
After a short while you will have a screen like this. Click the Custom button.
Now Microsoft Update will check if you have missing updates. This might take up to half an hour if you have not used Windows Update or Microsoft Update before.
If Microsoft Update or Windows Update will display some error page instead, try restarting your computer first. If this does not help, use this Fix It tool for repairing Microsoft Update problems.
Service Pack 3 requires updated versions of Windows Installer, BITS and Genuine Advantage Validation Tool to start the installation. If one or more of these are missing, you will see a screen like this. Click Download and Install now.
Please wait until the updated program has been installed. Then click Continue in the summary screen.
Sometimes a restart is required to complete the installation. In such cases return to Microsoft Update as described above.
And finally you have reached the Service Pack 3 installation option! Click Download and Install Now.
If you like headaches and confusion, read the license terms. 
If not, click I Accept right away.
After that, Service Pack 3 for Windows XP will be downloaded. It could take quite a while depending on your Internet connection speed - up to half an hour is completely normal.
After the download is complete, Service Pack 3 Installation Wizard opens. Click Next.
The installing process will take quite a while. It could consume up to an hour or more on slower computers. Have a nice glass of juice and do some exercise while the Service Pack is being installed.
When it gets to the point where you see "Finishing installation" screen, it will still take several minutes to complete.
After successful completion you'll see this. Click Restart Now to restart your computer:
After restarting, your computer will do some post-install configuration and you will see screens like this. Starting Windows will also take a little more time. This is normal and it happens only once. But after all this you are done installing Service Pack 3! 
If you have not yet configured Windows Update, read the Configure Automatic Updates in Windows article.
Don't forget to install free security software:
