Just SP2, and then the updates

And if you have Microsoft Office on there, or pieces of it like MS Word, then run it through
Office Update too.
By the way, don't hook the computer up to a wired or wireless network until it's got firewall protection (such as a router or the Windows firewall), because "raw" WinXP is easy prey for direct worm infections, computer-to-computer, without you doing anything wrong yourself. If you have no router, then before networking, enable the Internet Connection Firewall (old name for the Windows Firewall). Start > Help > search for "firewall" for assistance if you need help finding it.
If you can install SP2 from a CD while offline, that's a good move too.