Windows XP Service Pack 3 and Internet Explorer
The IE Blog has some information regarding things to watch out for when installing XP SP 3 over different versions of IE.
Internet Explorer 6 Users
XPSP3 will continue to ship with IE6 and contains a roll-up of the latest security updates for IE6. If you are still running Internet Explorer 6, then XPSP3 will be offered to you via Windows Update as a high priority update. You can safely install XPSP3 and will have an updated version of IE6 with all your personal preferences, such as home pages and favorites, still intact.
Internet Explorer 7 Users
If you are currently running IE7 on XPSP2, Windows Update will offer you XPSP3 as a high priority update. If you choose to install XPSP3, Internet Explorer 7 will remain on your system after the install is complete. Your preferences will be retained. However, you will no longer be able to uninstall IE7. If you go to Control Panel->Add/Remove Programs, the Remove option will be grayed out.
Internet Explorer 8 Beta 1 Users
Installing IE8 Beta1 on Windows XP SP3 is fully supported, so go ahead and upgrade your computers to XPSP3 and then install IE8 Beta 1 to try out our new features. You will be able to uninstall IE8 Beta 1 at any point to revert back to either IE7 or IE6 depending on what you were using before.
However, if you already have IE8 Beta 1 installed on XPSP2, Windows XP SP3 will not be offered to you via Windows Update. This is because after you update your system to XPSP3, you will no longer be able to uninstall IE8 Beta 1 and the Remove option will be grayed out under the Add/Remove programs in Control Panel. The reason is the same as in IE7 case described above. Since people are more likely to uninstall beta software, we strongly recommend uninstalling IE8 Beta 1 prior to upgrading to Windows XP SP3 to eliminate any deployment issues and install IE8 Beta 1 after XPSP3 is on your machine.
Hat tip to Jon.