Windows XP Service Pack 1

[Simon]

PC System
AMD Athalon Xp1900+, ASUS A7333 Chip set
512Mb DDR Dimm PC2100 Memory
ATI Radeon 8500 LE 64Mb
Creative SB Audigy Sound Card

I have been having problems with installing Windows XP
Service Pack 1. Particularly with what appears to be the
drivers for my graphics card.
If I try and install the service pack it appears to hang
at installing file ati2mtag.sys, the only way I can get
it to install is by uninstalling my graphics card
drivers. However my pc appears to run slower utilising
the service pack and if I try and Virus scan (McFee Proo
V6) my hard disk the coputer hangs at the
C:\WINDOWS\ServicePackFiles\i386\ati2mtag.sys file?
According to the system all the hardware is functioning
correctly.
I have followed instructions form the service pack 1 disk
I received from Microsoft UK but to no avail. I have had
to uninstall the service pack to get my pc to function
correctly.
Could this be due to some of the incompatability issues
betwwen XP & ATI graphics cards that some of my friends
seem to suggest?