Mostly works fine for me but if you have any leagcy type programs can be a bit iffy. On balance do it but make sure as always that all data backed up and all original program discs to hand.
it has worked fine for me.chances are,if you stay up to date with 'windows update' that you have a portion of it already installed.
i have also heard some horror stories,however.
I have had dozens of machine fail and dozens that are OK after SP-2 has been installed and I still don't know why this should be. When it goes bad it is unrecoverable: you have to start from scratch. My 2d: I think for the extra features SP-2 provides (the pathetic security centre) it is not worth installing.
I'd heard quite a few horror stories as well so delayed installing it. I suppose people are quick to complain that it's gone horribly wrong but that you're less likely to tell the world that it installed without any problems. I have had no problems with it whatsoever, thankfully.
In a way, everything Microsoft do is still beta testing!