Windows XP SP3 is currently available via Windows Update and Windows Download. It is expected to become available via Automatic Updates between June and July. SP3 includes more than 1,000 fixes. An update of that magnitude should only be done after creating a backup of your computer, just in case something goes wrong. I successfully upgraded all four of our PCs at home and have them all working smoothly. It seems, however, that some HP and Compaq AMD PCs are having problems with Windows XP SP3. After the installation of SP3, the computers boot up to a BSOD.
HP acknowledges a problem related to a Power Management Feature and offers a work around. If you have an AMD HP or Compaq AMD system, there is a small tool available that will check if you currently have the Intel driver set to load on startup (which will cause problems and needs to be disabled before installing SP3). If the tool finds the driver installed, you will have the option of disabling it, therefore preventing the BSOD after upgrading to SP3. You can read more about the tool and download it at Jesper Johansson's Blog. Additionally, if you install SP3 and have problems, Microsoft is offering free support.