Edited by WyllyWylly to fix broken link.. <img src=/S/smile.gif border=0 alt=smile width=15 height=15>

If you have installed Boot XPv2 which is an interesting and useful download which among other things allows you to change your boot screens when you boot up in7 graphics formats Benefits of Boot XP--here are some screenshots, it can and probably will block the download of Win XP SP1 or the install from the CD with this error message (happened to me and initiated a search for an explanation of the error message):
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The core system file (kernel) used to start this computer is not a Microsoft Windows file. The Service Pack will not be installed. For more information, see KB Q 327101 at ...
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This might evoke an initial small shock at first, because you were probably sure that your Windows XP was deploying a kernel that was a Microsoft Windows file. Boot XP changes some registry keys , and it might be necessary to uninstall it, (the uninstall has a checkbox to restore the registry keys back). They are working on a fix for this. Microsoft's KB that the Windows error message hyperlinks you to doesn't exist yet. They are in the process or writing it Q327101.