I just formatted my wife's laptop and installed a nice, fresh copy of Windows XP SP2. Everything went great and smooth and it was really nice to clean all that crap off her system.
Naturally one of the first things I did once the install was complete was go to Windows Update to get all the latest updates. The only thing listed there was Service Pack 3, so I downloaded and installed it. Everything went smoothly without a hitch. It installed and told me to reboot, so I did. When the system loaded back up I went back to Windows Update to get any remaining updates. There were 12 of them. I selected them all and told it to download and install. Everything downloaded but when it came time to install, I got the message "Some updates were not installed" which really meant "None of the updates were installed."
Figuring it to be a strange glitch, I rebooted the computer and tried again. Same result. I tried doing them one at a time. Same result. Only high priority updates. Same result. I tried many different combinations but they all have the same result.
And I'm not alone.
So if you're thinking of doing a fresh install of Windows XP SP2, just be aware that you'll have to install every update since then manually, since Windows Update only lists SP3, at least until this is fixed.