Yes, installing SP3 on XP on Bootcamp messes the XP installation in a horrible way! At a certain point, the update fails writing a file on disk, the SP3 installation does not complete and XP is not able to boot any more! You have to reinstall everything…
So, after you install an XP on Bootcamp, DO NOT UPDATE WINDOWS!
At least, not until you read the solution to the problem, and follow these instructions:
But really I think this should be part of the general instructions for Bootcamp!