Error Install MS SQL Server Express in Windows XP SP3 / MSXML6 SP2
If you are trying to install SQL Server 2005 Express edition in Windows SP3 environment, it will most likely fail unless Microsoft has done something to fix this. Read through this blog to find how to get around with this issue.
Symptoms include SQL Server Express edition installation return error and the error log mentioned MSXML 6 Service Pack 2 (KB954459) — Configuration failed. I am not really sure what the root cause is, but it looks like Windows XP SP3 or MSXML 6 Service Pack 2 protects the MSXML 6 configuration file from update and changes. As a result, the setup fail to continue. 
There are some ways to solve this, including
•	Uninstall Service Pack 3, install Microsoft SQL Server Express edition, and reinstall SP3. 
•	Disable the File system protection temporarily using regedit.
But, in my opinion the best way is
•	Uninstall MSXML6 SP2, by using Windows Installer Cleanup Utility which can be downloaded from http://download.microsoft.com/download/e/9/d/e9d80355-7ab4-45b8-80e8-983a48d5e1bd/msicuu2.exe . Then install SQL Server Express edition just like usual. 

Source : http://www.ferolen.com/blog/error-install-ms-sql-server-express-in-windows-xp-sp3-msxml6-sp2/