Had a client that had this problem. Found this on the internet.
Access Denied When Installing XP SP3
While installing Windows XP SP3, you receive the following error:
Windows XP Service Pack 3 installation failed.
Access is denied.For more information, see Help and Support Center at http://go.microsoft.com/fwlink/events.asp.
Resolution:
2. If subinacl.exe is not installed, download and install subinacl.exe.
3. Create a file called reset.cmd with Notepad. Copy the text below into the file reset.cmd and run reset.cmd from an account with administrative privileges:
Windows XP Home Edition:
cd /d "%ProgramFiles%\Windows Resource Kits\Tools"
subinacl /subkeyreg HKEY_LOCAL_MACHINE /grant=administrators=f /grant=system=f
subinacl /subkeyreg HKEY_CURRENT_USER /grant=administrators=f /grant=system=f
subinacl /subkeyreg HKEY_CLASSES_ROOT /grant=administrators=f /grant=system=f
subinacl /subdirectories %SystemDrive% /grant=administrators=f /grant=system=f
subinacl /subdirectories %windir%\*.* /grant=administrators=f /grant=system=f
Windows XP Professional:
cd /d “%ProgramFiles%\Windows Resource Kits\Tools”
subinacl /subkeyreg HKEY_LOCAL_MACHINE /grant=administrators=f /grant=system=f
subinacl /subkeyreg HKEY_CURRENT_USER /grant=administrators=f /grant=system=f
subinacl /subkeyreg HKEY_CLASSES_ROOT /grant=administrators=f /grant=system=f
subinacl /subdirectories %SystemDrive% /grant=administrators=f /grant=system=f
subinacl /subdirectories %windir%\*.* /grant=administrators=f /grant=system=f
secedit /configure /cfg %windir%\repair\secsetup.inf /db secsetup.sdb /verbose
4. Run windows update.
Windows XP SP3 should now install.
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