BEFORE you start installing the VS 2005 SP1, make absolutely sure you have enough disk space... Otherwise, you will surely regret it: if the installer runs out of space, it will mess up your .Net installation and not only Visual Studio will stop working but an assortment of other applications. I had the same problem on two installations, after the two mentioned successful ones.
The installer dumps a 460+ MB installer package into your c:\windows\installer folder and names it differently every time. So if you cancel an installation (e.g. to uninstall the damn web applications add-in that I always forget to remove) you could end up with multiple copies of the same half-gigabyte package and thusly short of disk space. The installer then reports that insufficient space is available and even if you clean up your disk and click retry it will eventually die with error 2908 and leave your system in a demented state.
So what do you do? Some say you need 4 gigs on your hard disk to make it work. I personally redirected the TEMP environment variable to another disk with lots of space, but that is only part of the solution because only part of the files go into the temporary folder. There is a batch file (see links further down) that turns off some kind of caching (haven't had time to go into details) that could save space and make things somewhat faster.
I'm trying as we speak (well, sort of) to repair a destroyed VS installation so stay tuned for results. In the meantime, some useful links:
How to disable the patch cache and make the installation somewhat faster (so you can retry more times in 24hrs :)):
A sum-up on what goes on and how to get yourself out of the mess if you got into it:
How to get a debug log from the installer (hopefully you won't need it):