I had the same problem as you all, hence my posting on this thread. AUinstaller3.0 did not fix the SVCHost problem so I just turned everything off. I can't even run the ActiveX plugin on the Windows Update website.
On the underlaying topic of proper research and documentation, I just have to say all of you are right, to some extent.
MS (yes, Sheenan, I do mean MICRO$OFT) should've have made the SP3 update require User Permission to install since they KNEW from the beginning it was not complete. (which is kind of an prescription drug paradox "you take an asthma med and the side effects are rashes and shortness of breath"). They should've also provided proper documentation about preparations and precautions (case in point, the missregistration of wuauserv.dll/wuauserv2.dll AND the deletion of previous restore points when SysRes has not been assigned enough memory, since those seem to be the most common problems floating around and they shouldve surfaced on the testing phase IF they did do a proper testing phase.)
BUT the user, myself included should've also done more research. Since this is a new update, way new, one would've encountered almost no material TO research, therefore prompting to wait a bit more on the installation of SP3.
I guess the mayority of end-users (oblivious, non-geek, and computer savvy) are not bare-bone experts, and do not have the knowledge nor the time to do a complete system image or spend several hours rummaging through websites and technical data to find out if they should or should not install a piece of code from a vendor they have been condition to trust blindly (case in point, "silent" automatic updates.)
So take a chill pill, y'all! Cause in computers like in life you only got options: Take the plunge, or don't do crap (oops! LANGUAGE LOL.)