When applying SP3 to a SQL Express instance (on XP Pro), it stops near the
end with the following error message, even though we have unchecked "enable
user instances".

SQL Server Setup has encountered the following problem:
[Microsoft][SQL Native Client][SQL Server]Cannot update user instances.
Reason: Cannot start user instance 'FF9C0784-9B79-48' for update.
Error code: 0x3c0c..
To continue, correct the problem, and then run SQL Server Setup again.

Any idea what this means and how to fix it?

Thanks.