The error message "failed to unregister .srg file" is nothing to worry about. It's caused by installing Office 2000 without uninstalling Office 97 first. According the following Microsfoft KB Article you may receive the message numerous while uninstalling Office 97 but just keep hitting OK and it will uninstall.
OFF97: "Failed To Unregister .SRG File" Error When Uninstalling Office
Uninstall Office 97 then uninstall 2000.
For the Service Pack 3 error - try the following:
Error message when you try to install Windows XP Service Pack 3: "Access is denied" or “Service Pack installation did not complete”
If you have to try method 3 - please do the following before you backup the registry.
In Windows Explorer go to following:
c:\windows
Highlight the repair folder on the right > right click select copy
Highlight windows folder again > right click select paste. This will make a copy of the repair folder and name it copy of repair. Rename this folder: repair2.
Then backup the registry. Easiest way to this is to click Start > All Programs > Accessories > System Tools > Backup
Click Next > Select Back up files and setting > Click Next > Select Let me choose what to back up
Click Next.
Click the + sign next to My Computer > Tick System State. Make sure nothing else is ticked. Click Next.
When asked to choose a place to save your back - click browse. You may get an error - just click cancel - in the save as window - double click My Computer > double click Local Disk C: > Click Save. Click Next. The backup may take a while to run.
Now if your not sure what your administrator password is or if the account even has one do the following (I mean the actual account called administrator not a user account that has administrator privileges): You will need to be logged in with an account that has administrator privileges to do this:
Click Start > Run > type: control userpasswords2 > Click OK
Highlight the Administrator account > select reset password > make the password whatever you want > click OK > Click Apply > Click OK.
Now you can try method 3 that Microsoft lists and if anything goes wrong and your pc won't boot afterwards we can fix it with Recovery Console. Make sure you have your XP cd handy just in case.