Windows XP SP3, which was unofficially released almost a week ago and has been available to TechNet and MSDN subscribers for even longer than that, does not come with Windows Internet Explorer 7. Whether you have Internet Explorer 6, 7, or 8b1 installed, the installation of XP SP3 will not affect your version of Internet Explorer. However, there are differences that are worth noting for each version, with the most important point for IE8b1 users being that they should uninstall it before applying XP SP3. Jane Maliouta, Deployment Program Manager for IE8, explains:
Source: ARS Technica