Oddly, one of my co-workers just set-up a brand new Dell computer and updated to SP3 during installation. It took him over two weeks to get things fully sorted out. My home computer wants me to install it and I'm too chicken.
Newer Dells come with Windows Vista. (You have to request to downgrade and I believe Dell charges for this.) If he tried installing SP3, I can understand why he was having problems. SP3 is Windows XP only not Vista.
Windows Vista, I believe, is only at SP1.