Paul Thurrott claims to have the inside scoop on both Vista SP1 and XP SP3.
Microsoft will ship Windows Vista SP1 concurrently with Longhorn Server in Q3 2007 and SP1 will include a major kernel update for Vista that will bring the client OS up to speed with the version of the Windows kernel in Longhorn Server
Certainly that has been my impression for quite some time. If you spend any time trying to read between the lines with MS, that's the only reasonable conclusion.
He's not happy at all about what he thinks is happening with XP SP3, however.
The company has completely abandoned Windows XP, and it has absolutely no plans to ever ship an XP SP3...This flies in the face of its publicly-stated life cycle support plans. And it really freaks me out. It should freak you out as well.
I wouldn't be surprised if he's right on the button on that one too. Certainly, it's been quite some time since SP2, and there seems to be little monetary incentive for MS to pursue an SP3 at this point.
I hope Mr. Thurrott is correct on the first count, and wrong on the second count. Unfortunately, I think he's right on both.