Bellow you'll find a list of frequently asked questions, if you have a question which is not covered here feel free to ask in the forums.
If SP3 isn't already on your CD then yes. nLite has an option to do this and you can add it at the same time as my pack. Just download it from microsoft's download centre and point nLite at it on the service pack screen.
It basicly mirrors what Microsoft Update offers. Leaving out just the optional updates and registry entries, see the contents page for a full list of what's included.
nLite is needed to slipstream my update pack and addons into your xp source. A guide to using nLite can be found here, you'll find it has lots of options for customising your windows source.
First, start with a clean source, add just my stuff and test to see if you still get the problem. Then drop into the forums and I'll be happy to help you out, details of your problem and how to reproduce it is a good start.