You shouldn't HAVE to update IE on XP.

I didn't on this current install I just made not two months ago.

I installed from my install disc (which already included service pack 2). Then I installed service pack 3, which I already had handy.

I prefer to activate my install before I even install the service pack, and I do it by phone rather than online.

I also turn off automatic updates, and disable windows firewall since I install my own.

Also, make sure the following services are disabled: (start -> control panel -> administrative tools -> services)

(this is my current list of disabled services)
Alerter
Automatic Updates
ClipBook
Human Interface Device Access
Messenger ***EXTREMELY IMPORTANT TO DISABLE - MAJOR SECURITY RISK***
Network DDE
Network DDE DSDM
Routing and Remote Access
Telnet

Let me repeat again - TURN OFF MESSENGER SERVICE - MAJOR SECURITY RISK.

see for more info on services:
http://www.techrepublic.com/blog/security/10-services-to-turn-off-in-ms-windows-xp/354
http://www.jasonn.com/turning_off_unnecessary_services_on_windows_xp

Now I would feel comfortable enough to let the computer outside to play (let online).

Brian