Microsoft has made a decision to not release Windows XP SP3 to Windows Update and Download Center as pre planned to be released on 29th April because of a last minute compatibility issue with a Microsoft application Microsoft Dynamics Retail Management System.

Although the link we provided for SP3 before the release date still works.

Moderators at Technet Forum comment :-

In the last few days, we have uncovered a compatibility issue between Microsoft Dynamics Retail Management System (RMS) and Windows XP SP3 and Windows Vista Service Pack 1 (SP1). Microsoft Dynamics RMS is a retail chain management solution for small and midsize customers.

In order to make sure customers have the best possible experience we have decided to delay releasing Windows XP SP3 to Windows Update and Microsoft Download Center.

To help protect our customers, we plan to put filtering in place shortly to prevent Windows Update from offering both service packs to systems running Microsoft Dynamics RMS. Once filtering is in place, we expect to release Windows XP SP3 to Windows Update and Download Center.

Until we have published a fix for this issue, we advise Microsoft Dynamics RMS customers to not install either service pack.  Microsoft Dynamics RMS customers running Windows XP SP3 or Windows Vista SP1 should contact Microsoft Customer Support Services for additional information.

The fix is currently in testing and will be available as soon as that process is complete. 

Have a Nice Day and Enjoy!