i will ask you a question but post the response i assume is the answer anyway

did you restart between sp2 and sp3 install or did you go straight from sp1 to sp3?
anyways good luck, if this works you won't have to reinstall and wipe everything...you can just download a copy of xp and use your existing serial key. cheers. good luck
Insert the Windows XP startup disk into your floppy disk drive or insert the Windows XP CD-ROM into the CD-ROM or DVD-ROM drive, and then restart your computer. When you receive the following message, press a key to start your computer from the Windows XP CD:
Press any key to boot from CD
Note Your computer must be configured to start from the CD drive or DVD drive. For more information about how to configure your computer to start from the CD drive or DVD drive, see the documentation that came with your computer or contact the computer manufacturer.
When you receive the following message, press R to start the Recovery Console:
Welcome to Setup
Select your Windows XP installation. This installation is typically C:\Windows.
If you are prompted to type an administrator password, do so. If you do not have an administrator password, press ENTER.
At the command prompt, type cd $ntservicepackuninstall$\spuninst, and then press ENTER.
Warning After you complete this step, you cannot stop the removal process.
At the command prompt, type batch spuninst.txt, and then press ENTER.
After the removal finishes, type exit, and then press ENTER.
Restart your computer.
Important When your computer restarts, Windows Explorer (Explorer.exe) does not run, and you must follow these steps:
Press CTRL+ALT+DEL to start Task Manager.
Click the Applications tab, and then click New Task.
In the Open box, type regedit, and then click OK.
Locate and then click the following registry subkey:
HKEY_LOCAL_MACHINE\System\CurrentControlSet\Services\RpcSs
Right-click ObjectName, click Modify, and then type LocalSystem in the Value String box.
Restart your computer
Use one of the previous methods to remove Windows XP SP2 from your computer.
For additional information about how to install and use the Recovery Console, click the following article number to view the article in the Microsoft Knowledge Base:
307654 How to install and use the Recovery Console in Windows XP