I in no way take credit for writing this, I am only posting this here because I feel it might be helpful without people having to trawl through google.
Original link: http://support.apple.com/kb/HT3841
Fix:
Summary
When attempting to install Service Pack 3 on a Windows XP computer running Boot Camp 3.0 (which is included with Mac OS X 10.6 Snow Leopard), the following Copy Error dialog box appears:
An error occured while copying file osloader.ntd. Cannot copy file to destination directory. Click Retry to retry the operation or click Cancel.
Products Affected
Boot Camp, Windows XP
This dialog box appears because Windows is attempting to write to the first partition it sees to install the update. Using Boot Camp 3.0, the first partition it sees is the Mac OS X partition, which is mounted as read-only. This is why the copy cannot complete. In order to avoid the dialog box, complete the steps below to disable the OS X file system read feature so that the Windows partition is the first one that the update sees, then reinstall the update, then re-enable the OS X file system read feature.
Getting out of the Update installer
1. Click Cancel to dismiss the Copy Error dialog box
2. Another Copy Error dialog appears "Do you want to continue setup without copying this file?" Click No. (If you clicked on Yes, the update will still fail with a copy error, click Cancel).
3. A Service Pack 3 Setup Warning appears asking if you are sure you want to cancel. Click Yes.
4. A new Service Pack 3 Setup Error appears. The filename, directory name, or volume label systax is incorrect. Click OK.
5. Another Service Pack 3 Setup Error appears telling you the installation did not complete. Click OK to undo the changes. Windows will now back out the Service Pack. If any delete errors occur, click on Cancel. If asked to continue setup without copying a file, click No.
6. You will eventually get a final Service Pack 3 Error message telling you that the installation did not complete. Click OK.
7. Click Close to dismiss the Installing Updates dialog.
Disabling the OS X file system read feature
1. Click Start, then My Computer.
2. Double-click on the BOOTCAMP (C: drive At the These files are hidden screen, click on Show the contents of this folder.
3. Double-click on the Windows folder. At the These files are hidden screen, click on Show the contents of this folder.
4. Double-click on the System 32 folder. At the These files are hidden screen, click on Show the contents of this folder.
5. Double-click on the drivers folder.
6. Locate the file AppleMNT (it is a .sys file) and rename it to something like AppleMNT_keep.
7. Click Start, then click on Shut Down.
8. Click Restart to restart Windows XP.
Re-appying Service Pack 3
1. To make sure you can't see the OS X partition, click Start, then My Computer. You should not see Macintosh HD in Hard Disk Drives.
2. Click Start, then Windows Update.
3. Reinstall Service Pack 3. The install should proceed normally now.
4. When the Service Pack installation is complete, a window appears. Click Close.
Re-enabling the Mac OS X file system read feature
Note: Don't let your computer restart in the middle of this step. Click on Restart Later if you get a Restart dialog.
1. Click Start, then My Computer.
2. Double-click on BOOTCAMP (C:, double-click on Windows, double-click on System32, double-click on drivers.
3. Locate the file you renamed eariler, and change the name back to AppleMNT.
4. Click Start, then Shut Down.
5. Click Restart to restart Windows XP.
Note: This is only needed if your running Snow Leopard, original OS X users shouldn't have a problem with this.
Original link: http://support.apple.com/kb/HT3841
Fix:
Summary
When attempting to install Service Pack 3 on a Windows XP computer running Boot Camp 3.0 (which is included with Mac OS X 10.6 Snow Leopard), the following Copy Error dialog box appears:
An error occured while copying file osloader.ntd. Cannot copy file to destination directory. Click Retry to retry the operation or click Cancel.
Products Affected
Boot Camp, Windows XP
This dialog box appears because Windows is attempting to write to the first partition it sees to install the update. Using Boot Camp 3.0, the first partition it sees is the Mac OS X partition, which is mounted as read-only. This is why the copy cannot complete. In order to avoid the dialog box, complete the steps below to disable the OS X file system read feature so that the Windows partition is the first one that the update sees, then reinstall the update, then re-enable the OS X file system read feature.
Getting out of the Update installer
1. Click Cancel to dismiss the Copy Error dialog box
2. Another Copy Error dialog appears "Do you want to continue setup without copying this file?" Click No. (If you clicked on Yes, the update will still fail with a copy error, click Cancel).
3. A Service Pack 3 Setup Warning appears asking if you are sure you want to cancel. Click Yes.
4. A new Service Pack 3 Setup Error appears. The filename, directory name, or volume label systax is incorrect. Click OK.
5. Another Service Pack 3 Setup Error appears telling you the installation did not complete. Click OK to undo the changes. Windows will now back out the Service Pack. If any delete errors occur, click on Cancel. If asked to continue setup without copying a file, click No.
6. You will eventually get a final Service Pack 3 Error message telling you that the installation did not complete. Click OK.
7. Click Close to dismiss the Installing Updates dialog.
Disabling the OS X file system read feature
1. Click Start, then My Computer.
2. Double-click on the BOOTCAMP (C: drive At the These files are hidden screen, click on Show the contents of this folder.
3. Double-click on the Windows folder. At the These files are hidden screen, click on Show the contents of this folder.
4. Double-click on the System 32 folder. At the These files are hidden screen, click on Show the contents of this folder.
5. Double-click on the drivers folder.
6. Locate the file AppleMNT (it is a .sys file) and rename it to something like AppleMNT_keep.
7. Click Start, then click on Shut Down.
8. Click Restart to restart Windows XP.
Re-appying Service Pack 3
1. To make sure you can't see the OS X partition, click Start, then My Computer. You should not see Macintosh HD in Hard Disk Drives.
2. Click Start, then Windows Update.
3. Reinstall Service Pack 3. The install should proceed normally now.
4. When the Service Pack installation is complete, a window appears. Click Close.
Re-enabling the Mac OS X file system read feature
Note: Don't let your computer restart in the middle of this step. Click on Restart Later if you get a Restart dialog.
1. Click Start, then My Computer.
2. Double-click on BOOTCAMP (C:, double-click on Windows, double-click on System32, double-click on drivers.
3. Locate the file you renamed eariler, and change the name back to AppleMNT.
4. Click Start, then Shut Down.
5. Click Restart to restart Windows XP.
Note: This is only needed if your running Snow Leopard, original OS X users shouldn't have a problem with this.