Problems when installing SQL Server 2005 on an upgraded Windows XP SP3 with MSXML6 SP2
As mentioned in the SQL Server Support Blog, you may find an issue installing SQL Server 2005 if you install MSXML Core Services 6.0 Service Pack 2 on Windows XP SP2, then upgrade to Windows XP SP3, then try the SQL install.
Check out that post for more details, along with the KB for the problem.
