After SP3 and IE 8 update, most downloaded app installs do not work

After installing Windows XP Home SP2 from a MS Windows logo CD on a new HD (ie formatting it is the first step) and then upgrading IMMEDIATELY to SP3 (from MS Update, not from MS Downloads) and then upgrading IE 6 to IE 8 (this time from MS Downloads, not from MS Update), it appears most  downloaded apps will now install. After the initial XP SP2 install from CD I only installed 2 - 3 updates NEEDED to get the latest MS Update to work (including the Windows 3.1 installer). Then I did the SP3 upgrade. During the IE 8 install it asks if I wanted to install ALL Windows, and IE updates and I said NO and the install continued with no errors.

There is NO Antivirus SW of any kind installed yet. The only addons for IE are the Google toolbar which the Adobe Reader install does first (if I do not uncheck the optional box).

(1) Adobe Reader fails in the Adobe Download Manager install section (or the Reader install Section it is hard to tell AND IT DOES NOT MATTER as either of these are supposed to JUST WORK.) I believe it is in the Reader install section with the progress bar at about 2/3 to the right. The error sometimes refers to GetPlus (I did not write down the exact error). The error was more commonlyh something about app init fails.

I then install Firefox from Mozilla AND THAT INSTALL WORKS. I then do the Adobe reader install using Firefox AND IT FAILS AT THE SAME PLACE. So this problem and this post is NOT limited to downloads within IE 8.. However, when I installed Firefox (done after IE 8) I choose the Firefox first run option to copy all settings from IE and that just might mean there is still AN IE 8 tie-in here.

(2) To make sure this is NOT Adobe reader specific, I then download and iinstall iTunes and it fails with a generic error message (i.e an error occured and iTunes does not specify what it was and no changes have been made to your PC).

Regarding staying with SP2 (where I have never had problems with downloaded installs to ANY HD installed from the XP SP2 CD)  MS decided that after early July 2010 they would no longer provide MS updates to SP2 machines. THAT IS THE ONLY REASON I UPGRADED TO SP3. In the past I have left the PC at SP2 and let the customer decide whether to update to SP3.

Regards,
  Mike