It appears this happens to the following 15 files followed by the description if any:
1) snmpcl.dl_ WMI SNMP Class Library
2) snmpthrd.dl_ WMI SNMP Thread & Log Library
3) staxmem.dl_ Microsoft Exchange Server Memory Management DLL
4) admexs.dl_ IIS AdminEx sample DLL
5) AppConf.dl_ Microsoft Internet Information Services Helper library
6) iisadmin.dl_ Microsoft Internet Information Services Metadata and Admin Service
7) iisfecnv.dl_ Microsoft Internet Information Services FE Character Set Conversion Library
8) infocomm.dl_ Microsoft Internet Information Services Helper library
9) iscomlog.dl_ Microsoft IIS Common Logging Interface DLL
10) lonsint.dl_ Microsoft Internet Information Services NT specific library
11) nsepm.dl_ Microsoft Internet Information Services NSEP mapping DLL
12) rpcref.dl_ Microsoft Internet Information Services RPC helper library
13) uihelper.dl_ Microsoft Internet Information Services UIHelper Module
14) davcdata.ex_ Microsoft Internet Information Services HTTP-DAV common data
15) icwconn1.ex_ Microsoft Internet Connection Wizard
So it appears that on the Copy error, if I select Cancel, it will ask a question of
"Do you want setup to continue without copying file?" which has a Yes/No and regardless which I select, it will continue without copying the file and Windows XP will finish the installation and reboot and work correctly. So not sure if it's the ISO that's bad or the file already exists on the HDD expanded but may be a older version if it compares CRC.