XP Acting Strange

After a HD failure, I reformatted an old HD and loaded XP Pro (SP2) - typical install. Some components seem to be missing though, including several utils.
Even stranger, I cannot load anything that is compressed, only programs from my own software. Put another way, anything downloaded, like iTunes, will not decompress and load. The message says, "Windows Installer Service Missing ".
Say what?
OK, I download Windows Installer 3.1 from MS, and it does nothing.
I tried doing a repair off my XP Pro disc, and nada.
I'm tired of scratching my head, who's got some ideas?

 

I'm very hesitant to go w/ SP3 because of the many issues I've read about on this site.

 

Also, this same OS has always worked fine for me until this installation, though this was a typical install, no different than before.

 

Chas, did you go into MS updates to install SP2 KB's after you installed XP Pro? Make the plunge into SP3 as I have now got 5 Home built PC's all working AOK with SP3. Apart from ensuring the comps were clean ( no virus/malware ) and on two comps I had to restart the Download from MS Update a second time, they are all working perfectly OK. Neil.

 

This is now (hopefully) a non issue as my new HD just arrived, so this old one will now be gone. After I format and load XP on the new drive I'll post back.
Thx!