Your options are SP2 or SP1a, do NOT go lower than that. Lower than SP1a and you begin to suffer in performance and security.
All the features in SP2 over SP1a like firewall, and certain fixes can be mostly disabled.
Some really really badly programmed applications might have issues with SP2, but there's not a lot, in fact none I can name off the top of my head.
There's fixes for most programs that used to have problems in SP2, like the 16-bit subsystem error.
If you get any problems with SP2 just post and I'll try to help you. Unless your programs really suck you shouldn't have an issue.