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Fixed my problem too.
The first article (replacing the drivers.cab file) fixed my problem as well.
I couldn't get any pointing devices (including Microsoft Optical Wheel Mouse and built-in Dell Touchpad) to install until I followed your suggestion to replace the drivers.cab file with the one from the original Windows XP/SP2 CD.
I don't know if it is related or not, but I didn't have this problem before upgrading to SP3 for WinXP.
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