yeah, i heard sp3 is a nightmare that's why i'm staying clear from it, actually the important security updates can all be downloaded separately without sp3.
it's not a good package, it cripples zonealarm, some hp peripherals' drivers and ati's catalyst.. the driver would still work but you'd no longer have control over your graphics card; i even read somewhere that amd machines were rendered useless without being able to boot.
ms sez the manufacturers should update their software but obviously it's a botched job. if you have bigfix
http://www.tucows.com/preview/208920 you can use to stay up-to-date with patches without the need for microsoft's messy packs.
check to see that all your peripherals, drivers and software are working as they should, if they are..that's fine, keep sp3.. but if you notice anything acting jittery then perhaps you should uninstall it and just apply the security patches separately without the rest of the junk that comes bundled in.
as for oe, you just need to set open passed urls in new tab in kmeleon preferences
EDIT: remember, if you decide to uninstall sp3, you must do a registry restore witj erunt
EDIT2: and disable windows update
http://www.theeldergeek.com/disable_automatic_update.htm
EDIT3: browsers not connecting might be due to sp3 enabling the windows firewall and not allwing exceptions, open windows firewall from the control panel, if you have another firewall then disable it, if you want to keep it enabled just make sure that don't allow exceptions is unchecked: