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ArcGIS, ArcIMS or ArcSDE Service Pack install. *.MSP, is associated with Microsoft Paint and does not install the service pack.
The file format .MSP is associated with Microsoft Paint. It should be associated with Microsoft Installer.
If the problem persists, start the Service Pack installation manually by using the following command:
msiexec.exe /p [location of service pack]\<Service_pack>.msp REINSTALL=ALL REINSTALLMODE=omus