We noted earlier today that a download link to Windows XP's third service pack had shown up on the download.windowsupdate.com domain. However, as it turns out, Microsoft has officially decided to postpone the release of Service Pack 3.
In a post on the TechNet Forums earlier today, Microsoft Serviceability Release Manager Chris Keroack said a compatibility issue between the Microsoft Dynamics Retail Management System and both Windows XP SP3 and Windows Vista Service Pack 1 has come to light. "In order to make sure customers have the best possible experience, we have decided to delay releasing Windows XP Service Pack 3 (SP3) to the web," Keroack explains. "We plan to put filtering in place shortly to prevent Windows Update from offering both service packs to systems running Microsoft Dynamics RMS."
Microsoft will start rolling out SP3 once said filtering system is in place, and it's developing a fix so Microsoft Dynamics RMS users can later install SP3. In addition, ZDNet quotes a Microsoft spokeswoman as saying automatic distribution of Vista SP1 has stopped because of the issue, although Vista users can still upgrade manually through Windows Update.