Disclaimer The opinions expressed herein are my own personal opinions and do not represent my employer's view in anyway.
We have an old Dell Dimension 4400 with Windows XP Home Edition, SP1. When we tried to upgrade to Windows XP SP2, the system slowed to a crawl. It was terrible. When I removed SP2, it worked great again. I found one webpage which suggested replacing the standard hard drive would fix the problem. I tried that, and no dice. I replaced the Seagate with a Maxtor and Western Digital (I have these things laying around, since I'm kind of a pack rat when it comes to PC parts).
I had hopes that SP3 would not have the same issue, but it did as well. Once I removed the SP, it worked great again. My resolution in this case, since the computer is several years old and is wifey's main PC, is to get a new one and redeploy this one as something else.
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