Microsoft has delayed the release of a third service pack for Windows XP, blaming a "compatibility issue" between the software and a retail-chain-management application.

Microsoft had said last week that it completed development on Windows XP, Service Pack 3 (SP3), and that it would be available via its software-update services on Tuesday. However, incompatibilities discovered in the past several days between an application called Microsoft Dynamics RMS and both Windows XP SP3 and Windows Vista Service Pack 1 will force the company to hold off on releasing the software. Dynamics RMS is a retail-chain-management software for small and mid-sized businesses.

Microsoft said it is putting filtering in place to prevent its Windows Update service from offering both service packs to systems running Microsoft Dynamics RMS. Once that filtering is in place, Microsoft will release Windows XP SP3 to Windows Update and Download Center for users not running the application causing the problem. The company on Tuesday did not say how long putting in filters would take.

Microsoft is recommending that Microsoft Dynamics RMS customers not install Windows XP SP3 or Windows Vista SP1. For more information, those customers should contact Microsoft Customer Support Services, the company said.

A fix to the Dynamics RMS problem is being tested and "will be available as soon as that process is complete," Microsoft said. The company did not provide a time frame for completion of the testing and recommends customers visit its TechNet Forums for more information regarding Windows XP SP3.