Further to rdave13's advice I regularly do this using the same methods outlined. One tip however is during the setup decline to set automatic updates from the start otherwise whilst you're applying the two service packs the system will be attempting to update the OS itself.
Once you have SP3 installed manually go to the Windows Update site and continue installing Important updates only, reboting and repeating until you have them all. At my last count early July there should be about 131. Then take any optional updates - I installed about 18 leaving 4 alone - windows search indexing being one of them!
Finally then switch Auto Update back on.
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