DIdn't get that advice, but after about two months I finally isolated the problem on my system. Essentially it was Firewire. Apparently, there is some conjecture that Microsoft neglectfully or deliberately, pays little attention to IEEE 1394 a or b. Especially b! Why? It ain't theirs!
Anyway, I was finally able to get SP2 to install nicely by going into BIOS and turning my 1394 controller OFF!
Of course, that left me with unusable devices. I fixed the Epson scanner - it was good for either USB 2 or Firewire - so I put it on USB 2. Then my external data drive and external CD burner were both on Firewire.
So - the next step was to turn the 1394 controller back ON, and then XP found "new equipment." It could handle the controllers, but not the hub. So, I dumped the hub and direct connected my two devices to the two mobo ports.
Voila! more equipment found. But - they were incorrectly ID'd. So, I played with them a bit and was finally able to hot plug them into reality. A reboot lost them again.
Then I read some more about this problem (apparently very widespread) and went to my reserve drive which was still SP1. Everything was perfect there. And I copied the four driver files to a pen drive. Then I went back to the Sp2 drive, and manually replaced the 4 SP2 files with the SP1 files. It works. We are now into day three with about 12 cold boots, and all devices are seen and work.
Apparently there is still some work needed by Microsoft to open the door in SP2 for Firewire. In the meantime - we're good to go.
BTW - the RC1 version of SP2 installed perfectly and this problem did not exist. It started with RC2 and thestayed in the final version.