i downloaded xp2 package dirrectly from microsoft and when i open the package, it extracts and tries to install then says. windows xp sp2 cannot install. the product key used to install microsoft may not be valid, any idea?

Part of the update is to run an genuine authentication thingy.. Basically if your using a cracked version then it will fall over like you mentioned and you can't install the update.. Best thing to do if you don't have a genuine key is find a copy which has sp2 intergrated then turn off the updates (make sure you install some funky firewalls and virus software tho)...