lsass.exe is causing a memory leak during the setup process, presumably due to something you slipstreamed - usually caused by an update that doesn't play nicely with integration without hacking around and/or is corrupted in some form.
Apparently this is a known issue with nLite when slipstreaming IE7, according to some old forum posts from 2008. There's very little info otherwise that I can find that could genuinely be relevant to your own situation, but there's probably some post-EOL/POSReady patch that is causing issues.
On a note, did you slipstream SP3 into an RTM disc or was it pre-included on the disc (I read about and you physically own the disc by the looks of things)? If yes, try with the file "en_windows_xp_professional_with_service_pack_3_x86_cd_x14-80428.iso" (Retail) or "en_windows_xp_professional_with_service_pack_3_x86_cd_vl_x14-73974.iso" (VLK) - which I won't be linking directly here, but just search it with the quotes included and you should find it. It might be worth using wget or curl instead of a browser to download if you find a direct URL in an open server directory - CLI download utilities are purpose-built, extremely flexible and should reduce the likelihood of file corruption.
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