Bad news for those looking to get the latest XP service pack

DailyTech reported earlier today that Windows XP's third service pack was ready for full deployment via Windows Update, as promised by Microsoft.  However, in an eleventh hour move sure to draw criticism, the service pack was yanked by Microsoft and will not be released on April 29th as previously promised. 

The pack was pulled because it breaks or otherwise compromises the Microsoft Dynamics Retail Management System (RMS).  The RMS application is relatively uncommon and is chiefly used by small/midsize businesses, making Microsoft's decision to pull the pack seem a bit unusual.  A Microsoft spokesman released the following statement about the problem:
I wanted to update you on today’s planned release to web (RTW) (of XP SP3). In the last few days, we have uncovered a compatibility issue between Microsoft Dynamics Retail Management System (RMS) and Windows XP SP3 and Windows Vista Service Pack 1 (SP1).

In order to make sure customers have the best possible experience we have decided to delay releasing Windows XP SP3 to Windows Update and Microsoft Download Center.

To help protect our customers, we plan to put filtering in place shortly to prevent Windows Update from offering both service packs to systems running Microsoft Dynamics RMS. Once filtering is in place, we expect to release Windows XP SP3 to Windows Update and Download Center.

Until we have published a fix for this issue, we advise Microsoft Dynamics RMS customers to not install either service pack. Microsoft Dynamics RMS customers running Windows XP SP3 or Windows Vista SP1 should contact Microsoft Customer Support Services for additional information.

The fix is currently in testing and will be available as soon as that process is complete.

Microsoft released the service pack to manufacturers last week.  After complaints from Microsoft Developer Network (MSDN) and TechNet subscribers, it released the service pack to them as well.

Microsoft acknowledges that some users have downloaded the file through direct links.  It is advising against doing so.  It states:
Customers should not download Microsoft software from links posted on non-Microsoft websites, when those links point directly to the executable as is the case here. Customers should always download from a page on that provides all relevant download details, installation instructions, and release notes. In this particular case, it’s possible that some 3rd party websites are linking to the Windows XP SP3 software that we have published for MSDN and TechNet subscribers. Since we cannot confirm the source of every link that 3rd parties provide, out recommendation is that customers wait until we’ve published Windows XP SP3 to Windows Update and the Download Center.
Apparently the RMS glitch applies to Vista's first service pack as well.  Unlike XP SP3, Microsoft will not be pulling Vista SP1, but it is halting automatic downloads of the pack.  Says a Microsoft spokesman:
Microsoft is temporarily holding any additional automatic distribution of Windows Vista SP1. However, they continue to offer Windows Vista SP1 via Windows Update for interactive installation. While we are recommending that customers running Microsoft Dynamics RMS should not install SP1, there are many other customers who can benefit from installing Windows Vista SP1 immediately, so we are maintaining availability via WU.
Previously Vista SP1 distribution was halted due to reboot problems caused by one of the pack's prerequisites.

Vista SP1 and XP SP3 provide various bug fixes, security, and performance updates to their respect operating systems.

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