First suspicion.
Is Pinnacle Studio qualified to run on XP? If it's an older package, it may well be seeing the free space less what it wants as a negative number because discs with 100 Gb available just didn't exist when the package was written. If this is an old 95 or 98 package, you may need to look and see if there's an update for it for XP.
Next thing would be to see if there are any patches for it on the vendors web site, assuming there is one. SP2 could well have had some implications for the software you're trying to install.
Another thought, are you on XP home, or XP Pro. In some cases, if you are on XP Pro, and the account you are running in to install does not have full admin settings, some older software can throw all sorts of strange responses, not because of a "real" fault, but because it can't get write access to a directory that it's trying to install in. Even recent packages can suffer from that problem.
Another thought would be to have a look at the options that are available in a "custom" install, and see if that changes anything.
Hope that helps
Best of luck