Microsoft has released Service Pack 3 for Windows XP to selected beta testers, according to multiple sources around the Web. Windows XP SP3, build 3205 contains 1,073 patches and hot fixes including security updates, according to bloggers at NeoSmart Technologies.

Enhancements include a simplified activation system, a network access protection module backported from Windows Vista, as well as improved support for cryptography.

Excerpt from The Inquirer:

There is also the new Kernel Mode Cryptographic Module so that the kernel now includes an entire module has access to multiple cryptographic algorithms and is available for use in kernel-mode drivers and services. It also has the “Black Hole Router” detection so that Windows XP SP3 can detect and protect against rogue routers that are discarding data.

The finalized version of SP3 is expected to be released sometime in the first half of 2008.