All of the angst over whether to install SP3 buzzing around the blogosphere may be more hyperbole than actual experience. Mark Kaelin installed it on his test machine and nothing bad happened.
You read the title correctly -- nothing bad happened. The installation of SP3 took about a half an hour and involved two restarts, but, as far as I can tell, my test XP box is running just fine.
Of course, as a test machine there is much less opportunity for software to break, especially if the the software is custom or proprietary to your particular enterprise. So your mileage may vary as they say.
But all of the angst over whether to install SP3 buzzing around the blogosphere may be more hyperbole than actual experience. At the very least, you should be testing whether an SP3 deploy breaks anything.
By the way, while installing SP3 on my Windows XP box I noticed that AVG from Grisoft has an update to version 8.0 ready. In fact, 7.5 will cease to work after May 31, 2008. If you have installed AVG for clients or family, it might be a good time to check up on them to see that they keep their virus/malware software working properly.