Since last April or May, I used SP2 on a Dell 4550 from the betas, release candidates and finally the official release without re-formatting and re-installing. No problems at all. I use a video tuner card, a breakout box and have some highly tweaked settings that make it extra tedious to do a clean install (this is before I started using imaging software). I've done the taxes two years in a row on this box and have upgraded, uninstalled and re-installed many programs. When things started to get "buggy" (long boot up times, long shutdown times, programs slow to load etc...) I was able to "bail" out the system with the beta versions of SP2, the rc's and finally the final ...and I'm quite impressed. The box is rock solid.
I reformat and reinstall on the other boxes frequently and often re-image every other day. I refrained from installing SP2 on my primary box until about a month ago and am now quite comfortable with it. I had been re-imaging with SP1 and the subsequent security updates, until I noticed that the SP2 box seemed faster on the internet ...I saw no good reason not to make the change now. I disable auto updates, system restore and the security center. I use Zone Alarm Pro and NAV 2003. I use IE6 and thoroughly enjoy the pop-up blocker and the enhanced browser security features that SP2 affords. My fallback images are now all fresh activated SP2 installs.
I use Acronis True Image and it takes about three minutes to restore the fresh image ...much faster than it takes to clean the internet cache, history, index.dat file, scan for spyware, scan for viruses, clean the registry and defrag etc...