I'm not the best on advice for updates of software, but i've installed SP2 on every system that i've ever ran Windows XP off of and had zero issues/problems since the day of it's release.
Of course i always run the latest software/patches to make sure there ain't any incompatibility issues, so if you are running software that you know is a few years old, you might face issues.
But aside from that, to be honest, i have no idea why anyone wouldn't want to upgrade going on it's wide acceptance factor.
SP2 has been tried and tested, i say backup any important data and go for it.
But that's just my 2 cents.
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