I will suggest the way I would do it.
1] You want to perform a fresh install of an OEM XP which includes SP2.
Let the CD delete any existing partitions and reformat the drive, (unless you are installing as a dual boot or similar).
Do you have the drivers CD?
Install XP SP2, and when the install is complete, tested and stable, turn on the firewall or install your own, then visit Windows Update and download and install SP3. It includes every update from SP2 up to SP3.
On a fresh install there should be no problems with SP3 unless this is an HP computer with an AMD chip. If it is, visit HP for a fix.
2] When that is stable, re-visit Windows Update and install all other critical updates. One of these will include IE8
3] Should you install IE8?
Yes, it is more secure.
I hope that helps
Fresh Install of WinXP Home SP2 OEM.
A couple questions. All security/critical updates and the like not software or any of that..
On Windows Update, Should I just install SP3, are the any real problems ?.
Or Should I ust install all the fixes for SP2 ?, There are 117 it shows, I have no problem with that (I am going to find and download them anyway).
It lists those 117 by newest first, should I install by oldest first or newer ones first, in hopes that will eliminate the older ones ?
Should I Install IE8, I like IE7. No problems there.