Windows XP (SP2) - Works for me!

The anti-Microsoft zealots accuse me of being brainwashed and the Microsoft zealots accuse me of being a traitor.... 

I usually participate in Microsoft's "dog-food" programs (internal beta testing), but I delayed doing to with Windows XP (SP2). There was allot of dialog about time consuming impact of SP2 and my workload this summer hasn't afforded me the schedule flexibility that some beta participation desires.

When Windows Update started pushing out SP2 (2 weeks ago) I installed it on several of the machines in my lab.

No problems across the board. Nothing broke.

The configuration dialogs are a bit annoying and having to click twice to intentionally download files is an annoyance, but I don't find these behaviors any more intrusive than the frequent dialogs form other security tools that I use like Norton's Internet Security and Zone Alarm Pro.

I guess your mileage may vary and usually when there is allot of noise about something new from Microsoft I can at least see what the fuss is about, but in my experience so far SP2 is pretty painless.