Boot Camp: Installing Microsoft Windows XP Service Pack 3 (SP3)
If you attempt to install Microsoft Windows XP SP3 on an Intel-based Mac (Mac Pro, Mac Mini, MacBook, MacBook Air, MacBook Pro, or iMac) that is running Windows XP SP2 via Boot Camp, an "Out of disk space" alert may appear even when there may be adequate disk space to install the update.
Update to the most recent version of Boot Camp. Updating should allow the installation to complete.
Important: Apple does not provide technical phone support for installing, using, or recovering Microsoft Windows. Support is available for using Boot Camp Setup Assistant, as well as installing or restoring Boot Camp software while booted into Windows. Support articles and discussions may also be available on Apple's support website.