If you slipstream Service Pack 3 into a Windows XP source and you install it like that, you won't notice a problem. But if more changes are done to the source, you will get an error message at T-28 (sysoc.inf stage) stating that the file napclientprov.mof could not be found.
This error appears because the wbemoc.inf installation file (called by sysoc.inf) requests layout.inf to provide napclientprov.mof, but layout.inf doesn't have a record of it; the actual file is named napprov.mof (compressed to napprov.mo_) in the source and that's also the name layout.inf has. There is a second file, napclientschema.mof, that is equally affected by this but you don't notice it because of the way inf files deal with errors. Why this problem doesn't occur in normal situations is something I haven't found out yet.
To work around this, a custom package named wbemoc.cab was created containing updated versions of wbemoc.inf for each language. The updated versions request layout.inf to provide the files napprov.mof and napschem.mof, and then they are renamed to napclientprov.mof and napclientschema.mof respectively, something which should've been done by wbemoc.inf in the first place.
Download wbemoc.zip and extract it into the HFCABS folder. Do NOT extract wbemoc.cab; just take it out of wbemoc.zip and put it in the HFCABS folder so you end up with HFCABS\wbemoc.cab. HFSLIP will take care of the rest.
While Service Pack 3 can be installed on Windows XP Media Center Edition 2005, Microsoft haven't implemented the functionality to properly slipstream it into an MCE 2005 source. What you will end up with is regular XP Pro, with Windows Media Player 9 instead of 10. According to the latest news, Microsoft will not make available a version of Service Pack 3 capable of being slipstreamed into MCE 2005.
It may be possible to work around this limitation, but it will take some time to get there. In the mean time, slipstreaming Service Pack 3 into MCE 2005 is not supported.
The old trick to allow slipstreaming of Service Pack 2 into Windows XP while on Windows 2000 (to delete setupapi.dll, which HFSLIP does internally) is no longer enough. Service Pack 3's update.exe is not compatible with Windows 2000 anymore either, but this file is required to execute the slipstreaming so it can't just be deleted.
Since HFSLIP already supports the use of a custom update.exe in the HFTOOLS folder (for example, for when you try to slipstream Service Pack 4 into Windows 2000 Datacenter Server), you can take advantage of the same mechanism to make HFSLIP use the version of update.exe that comes with the old Windows XP Service Pack 2 installer. If you still have a copy of the Service Pack 2 installer lying around, please extract it and copy update.exe from the update folder into the HFTOOLS folder.