In order to install more software, including service packs, you need to be
logged in as a user with administrative rights.
It is also best to turn off all user programs, unplug all USB devices
(except mouse, keyboard, and printer, if those happen to be USB) before a
major installation/upgrade. I would leave the virus scanner on.
In case there are multiple users defined on the PC, reboot and login as only
one, an administrator, then try the installation/update. Installing SP-2
from the CD provided free from Microsoft should be easy. Of course,
"should" and "is" are sometimes different.
As for losing pictures and other personal files, the XP feature called
"system restore" should not impact any of those. BUT, using a PC-maker
restoration CD will usually format (i.e., erase) the hard drive, then
install whatever was on the PC when you received it.
In any case, you can probably copy all personal files off the PC in one of
the following ways:
1. From within XP normal mode (if that is working), copy to external USB
disk, CD, flash drive, etc.
2. From within XP safe mode (if that is working), copy to external USB
disk, CD, flash drive, etc..
3. By using a bootable CD with a different operating system. For example,
try the KNOPPIX CD, a free (but large) download at:
http://www.knopper.net/knoppix/index-en.html be sure to plug-in the
external disk or flash drive, before booting into KNOPPIX. By default
KNOPPIX will not write to your hard drive, although you can change that. It
will read NTFS formatted disks. As I recall, KNOPPIX also comes with a CD
writing program.
4. By temporarily placing the internal hard drive inside a USB enclosure
and connecting it to a different PC.
5. By connecting the PC to another PC on a network, or by USB cables. This
may require running special software on each PC, as well as special cables.
A computer store could certainly do this and then make a CD or DVD of the
data.
6. By temporarily attaching the internal hard drive to another PC (inside
the other box), then copy to wherever using the operating system and
software of that other PC.