I have an HP Pavilion media edition , It has a recovery program in it that when I press a function key, it reinstalls windows with all the factory settings, it has always worked like a charm, I do a destructive (complete) recovery once every couple months to make sure it stays fresh, because I download a lot of programs, movie etc... I just did a recovery yesterday. It worked fine after, perfect as usual. Then I installed all the updates. Then I installed service pack 3 as an update. It crashed my computer, It wouldn't boot at all, safe mode, last known good configuration, so I did another recovery (which usually works like a charm), but my computer still keeps freezing, Whenever I try to do automatic updates it fails every time. I am so sad, I have had my comp for a couple years and never had a problem with it until now. I tried re-installing the windows installer, that didn't help, I ran these commands:
Regsvr32 /s wuapi.dll
Regsvr32 /s wuaueng1.dll
Regsvr32 /s wuaueng.dll
Regsvr32 /s wucltui.dll
Regsvr32 /s wups2.dll
Regsvr32 /s wups.dll
Regsvr32 /s wuweb.dll

That didn't help. I have a windows xp installation cd, I don't want to use it though because I don't want to lose all the programs that came installed with my PC (factory settings). And even if I do re-install windows I might still have the same problem, like when I did the recovery, because the recovery basically re-installs windows.

The recovery that you normally do via the hidden recovery partition may have been compromised, leading to this situation. You SHOULD be able to contact HP and order a disk-based version of the recovery procedure for your specific model.

Once you have the complete recovery disks, it would work the same except you boot from the CDs.

Don't quite understand, it sounds like you cannot get into windows at all and then it sonds like you can get into windows to do things?

If you can get into windows, try uninstalling SP3, this will not happen quickly, unistalling
SP3 may take hours depending on system specs

To uninstall SP3,
How to remove Windows XP Service Pack 3 from your computer (http://support.microsoft.com/kb/950249)