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I am the Administrator on the PC, and have never had problems loading anything before.
I looked at the running tasks and ended all that I knew did not need to be running.
The logs linney brought up show the install failed when trying to update registry information...
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x2
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x0
1147.829: PruneCatalogsFromHotfixes:RegQueryValueEx Failed: 0x2
1147.829: Num Ticks for Copying files : 562532
1149.782: DoRegistryUpdates:UpdSpInstallFromInfSection Failed for ProductInstall.GlobalRegistryChanges.Install error: 0x5
1149.782: INF_REGISTRY Failed
1149.782: DoInstallation

oRegistryUpdates failed
1167.719: Unregistration of sprecovr successful
1168.110: Access is denied.
1212.094: Message displayed to the user: Access is denied.
1212.094: User Input: OK
1212.094: Service Pack 3 installation did not complete.
Select 'OK' to undo the changes that have been made.
1212.875: Message displayed to the user: Service Pack 3 installation did not complete.
Select 'OK' to undo the changes that have been made.
1212.875: User Input: OK
1212.891: Starting process: C:\WINDOWS\$NtServicePackUninstall$\spuninst\spuninst.exe /~ -u -z
1901.938: Software Update Rollback has completed with return code 0xbc2. This rollback requires a reboot.
1901.938: Service Pack 3 installation did not complete.
I also checked and removed all Avira software, so nothing could have been running.
I also used Microsofts reg clean to fix any registry issues.
A search of the Registry via regedit found nothing with the word Avira.
Again, spybot was shutdown, but even so it asks me if a registry setting change should be allowed when running.
I know of no other security software on the machine that would try to manage the registry.