I still would NOT recommend installing SP2 on a Mame cabinet unless you feel it absolutely necessary. If it's not broken, DON'T try to fix it!
But the fact of the matter is Xp IS broken. It's not major things, but they are annoyances that make it worth upgrading. I've been running service pack 2 for about a week now. It fixed various minor problems, it's stable, and the new firewall and pop-up blocker make it worth upgrading to. Btw the firewall doesn't cause any known problems, it's just that it blocks most ports by default and like zone-alarm it asks you if you wish to unblock when one is activated. Unlike zone-alarm it only asks you once and doesn't flood you with prompts all the time and waste 15-20% of your system resources. I was rather suprised that not only does it not suck, but it's actually quite good.
Also various older apps or projects I've been working on that use older 98 code magically work now where they didn't before. Some media player bugs are also fixed, allowing divx and other odd-ball codecs to work better.
Waiting until it's more proven would be reccomended, but you'd have to be a fool to not eventually upgrade to it. Running a build of windows without the latest patches is like driving a car that's been recalled. They warned you that it's dangerous so you better go ahead just in case.