To be honest, I havent had any problems at all with service pack 2; in fact... I find alot of the updates quite pleasant (cant believe I said that)
Some people I know however, have "cracked" copies of xp... Alot of the cd keys that come with those copies are blacklisted, which wont allow an install of sp1/sp2. a handful of keys seem to be on the borderline though (educational bulk keys that have 'escaped' into public); which would allow an install but then crash and burn after a reboot
..seen alot of oem copies of xp supplied with HP / Dell machines that tend to die after an install of sp1a / sp2 too