[NB: Kudos for this post needs to go to Greg and Andrew who actually solved this issue]
The MultiPoint SDK that I referred to in my previous post was designed to be installed on XP SP2 and Vista. Unfortunately the way the installer has been written prevents it from being installed on XP SP3. Here’s a bit of a hack to get around this limitation
1. Download & Install Orca
Download Orca from the Windows Installer SDK: http://download.microsoft.com/download/platformsdk/sdk/update/win98mexp/en-us/3790.0/msisdk-common.3.0.cab (open the CAB and rename the Orca-file to Orca.MSI to install it)
2. Open the Installer file in Orca
3. Under “Tables” click “Launch Condition”, then change the first row’s conditions from “… ServicePackLevel = 2…” to “… ServicePackLevel >= 2…” 
4. Save and close Orca
5. Run the saved installer.