Well, since you've already started the recovery, there isn't any choice. You should be able to apply SP3 to the fresh XP install, as long as it included SP2.
As Newt says, the error message on the blue screen is of value. Without it, there is nothing anyone can do to diagnose the problem. Sometimes the error is written to the System event log, but not always, so it's a good idea to write down the pertinent information if you want to know what caused it.
The past week, I suffered a series of BSODs, not all alike, and after researching some of them, they all pointed to a memory problem. Turns out, I have one bad stick of memory. Without that research, I would have been looking at drivers, etc. and not finding the real problem, which was hardware.