Windows 2000 with (possibly) state of the heart 21th century hardware, can cause some issues. 😉
This problem might be related to EHCI USB controllers not well supported by Windows 2000 out of the box.
Once you are on VMware, try to disable USB before booting that guest. After that, try once again installing SP4. If it is successful, you might want to read a this Microsoft KB article.
Please post back