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The first question here is how are you trying to install SP2? Are you downloading it through the Microsoft update link or installing from a disk? One thing to be sure of when trying to install any service pack or new software is to disable any antivirus programs or firewalls that are active. That will hamper efforts to install many programs as well as MS updates.
If you are trying to install SP2 from a Windows installation disk that would also run into problems. You can download the full 266mb SP2 to a new folder created on your drive to install from there if needed. The redistributable full service pack can be found at
http://www.softpedia.com/get/System/OS-Enhancements/Windows-XP-SP2-RTM.shtml
Look for the red download button on the left side of the page to start the large download and save it to a folder. Another problem you may be seeing is the smaller amount of physical memoty installed on the system there. If you have a large number of programs and services running at the same time the amount of memory available is small. Reducing the number of things that automatically load with Windows could help see SP2 installed correctly.