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.