For all their faults,Microsoft,and I'm no fan,don't issue updates without justification.Annoying yes,because most pundits think that they have been around long enough to produce 'perfect' OS code.But this is a silly statement.No OS will work without problems once it's been released into the wild.
Indeed,without public testing,faults would be very low key.Lab conditions produce false readings.
As far as Service Pack 2 is concerned,according to Microsoft,it can have incapabilities with AMD 64 bit processors,Intel P.4,and Celeron D,which can prevent XP from booting normally.I.E. can lock up after SP2 install.
Get Firefox.
Upgrade all driver files,patches,etc,before installing SP2 is Redmonds answer.
Old versions of Zone Alarm Firewall can cause boot up errors.I am using the latest 'freeware' edition,and have had no problems thus far.Also Eset's Antivirus plus Norton Antivirus 2003 can cause problems after installing SP2.
However,SP2 is there to enhance XP,fix bugs,install the XP Firewall by default,and generally iron out any loose stitching.It's individual choice to upgrade,or not to upgrade,but it's better to listen to big bad Bill's org.than to be hacked somewhere down the line.
At least you have a firewall,and antivirus software,plus spyware preventative measures.To not install a Firewall,spyware,or adware of any kind is inviting disaster!
The web is educational,informative,fun,and a nightmare.Whilst your surfing yourchoice.com,some idiot is testing your PC for any exploit to 'mess' around.
It's like leaving your keys in your front door.Dont do it!
Keep fully up to date,be safe,and above all,if your that worried,get Linux.
All the best,
Nez.
More Info.
If you want more indepth reading,then visit the US.Computer Emergency Readiness Team report on SP2 at
http://www.us-cert.gov/cas/alerts/SA04-243A.html
Just out of interest.What is your PC configeration?