Thsi fix worked for me . . .
I have a 2 GHz MacBook Pro running 10.4.11.
I only have the last Tiger version of BootCamp.
I tried to upgrade my XP SP2 partition to SP3 and got the not enough disk space error that you got. Struggled with it for a couple of days, finally gave it up cause I don't use XP at all, really - but I do keep it up with all of the upgrades, virus protection, security upgrades, etc.
Any, that was a few months ago and today I started looking on the web to see if any solutions showed up. I Googled "xp sp3 on Tiger" and got to a link on this Forum started by Dmac77 on 30 May 2008 (XP SP3 Won't Install), with the solution coming from Moof1904 the same day.
He provided this link:
http://www.windowsreference.com/general/error-there-is-not-enough-disk-space-when-installing-sp3/
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You may experience the following error when installing Windows XP Service Pack 3 (SP3) when installing on Intel iMAC using Bootcamp to run Windows XP.
There is not enough disk space on C:\WINDOWS\$NtServicePackUninstall$ to install Service Pack 3 Setup requires an additional 4 megabytes of free space or if you also want to archive the files for uninstallation,Setup requires 4 additional megabytes of free space. Free additional space on your hard disk and then try again.
This happens because iMac uses EFI file format which Windows XP does not support. To workaround this problem, add a registry key as follows:
1. Click Start - Run - Type “regedit” and press enter.
2. Navigate to
[HKEY_LOCAL_MACHINE\Software\Microsoft\Windows\CurrentVersion\Setup]
HKEY_LOCAL_MACHINE
\Software
\Microsoft
\Windows
\CurrentVersion
\Setup
3. In the right pane, Right-click and select New - String value
4. Name it as “BootDir” and set its value to “C:\”
This should help. Try installing SP3 and should work fine.
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It worked for me. XP SP3 upgrade with Tiger (freebie) version of BootCamp