Overall Microsoft has patched a lot of things and SP2 includes all the previous hotfixes/pataches so you don't need to make a hundred other downloads.

So far very few breaks in code. The vast majority of reported issues involve having the firewall now enabled by default. When the firewall is either disabled or modified to allow the application to work most problems are resolved.

The same issue would happen with any firewall a user installs, ports need to be opened to allow certain applications to operate as they were written.

Overall I think SP2 is a good thing for Windows XP, but I would recommend waiting / checking that all your applications and hardware work correctly before just blindly rolling it out. I'm sure that in the next couple of months any real issues will be resolved and there won't be as much fear of installing SP2a