Most issues with SP2 were related to the software firewall and/or popup blocker. In my previous job we had plenty of clients that had specific ports mapped to their PC's that got killed (blocked) when they applied SP2. Simple solution is turn off the firewall (since they were all behind hardware firewalls) or add exceptions.
Anyway, if you're running XP and not running software that's not compatible with SP2 you should apply SP2. Even most software that isn't "SP2 compatible" really is but hasn't been officially labeled as such. Again in my previous job a client used a terminal emulation software that WebMD claimed wasn't officially SP2 compatible and supported yet worked fine.