Assuming you’ve already tried disabling your antivirus and antispyware applications, is it the Service Pack 3 installation that hangs or the whole computer? If the whole computer is freezing, you really have no choice but to do a hard reboot. If it’s the installation itself, one of the best solutions (as seen here) is to:
1. Start Task Manager
2. Select Processes
3. Select Regsvr32.exe
4. End Process
5. Close Task Manager
You should notice a good bit of hard disk activity after this. Let it go until the end of installation and restart.
Another option if the above doesn’t work is to again, go into the Task Manager as shown above and use shmgrate.exe in place of Regsvr32.exe in Step 3.
Keep in mind also the upcoming Windows XP End of Support date, which is April 8, 2014. If you meet the system requirements, it is strongly recommended that users make the move to a modern operating system such as Windows 7 or Windows 8 by then.