Overview of what happens to IE when installing XP SP3. In short:
– IE6: no problems there; All security fixes will be applied.
– IE7: no problems there; Yet you won’t be able to uninstall it anymore.
– IE8b1: “we strongly recommend uninstalling IE8 Beta 1 prior to upgrading to Windows XP SP3 to eliminate any deployment issues and install IE8 Beta 1 after XPSP3 is on your machine.”