Unfortuantly the following applies:
SP 3 cannot be removed easily due to system table changes that the service pack requires for maintenance. To revert to a build before SP3 was installed, you must reinstall SQL Server 7.0 or MSDE 1.0 and, if required, apply the service pack (Service Pack 1 (SP1) or Service Pack 2 (SP2)) you were running before you attempted to install SP3. Before you reinstall SQL Server 7.0 or MSDE 1.0, detach your databases on SP3 and reattach them after you reinstall SQL Server 7.0 or MSDE 1.0 and either SP1 or SP2. For information about using sp_attach_db and sp_detach_db, see SQL Server Books Online for SQL Server 7.0. As with any new installation, you must recreate the necessary logins. You must also recreate scheduled tasks dependent on information in the msdb database, as well as any changes you have made in the model database. If you use replication, you must completely reconfigure replication.
Rick.