If the driver is showing up successful, we can assume its an issue with the .exe file. But like you state coudl be driver related.
But......very strangly is sysmptom cannot be duplicated.........just happens to some and others not.
I think the best solution is to start a Database of issue of XP SP2.
Example(s):
My PC loaded with SP1, had xcontrol installed, donwlaaded the 256 install file of SP2 and installed and xcontrol works.
My PC loaded with SP1, did not have xcontrol installed, let windows update automatically install SP2, then tried loading xcontrol and doe snot work famouse 0x00000005 error.
They need to find common way of reproducing issue, once that maybe they can track down problem 100% with SP2.