My one opinion out of the many here may not matter, but what the hey. I have installed SP2 both on all my home PC's and work PC's and have had NO problems. To say you are"screwed for sure" if you install it is a false statement and should not be honored as a fact.
I run a bunch of proprietary software at both locations (Cisco VPN software, VNC software, AS/400, etc etc) and have not had any problems. I work on a corporate env of about 300 on site PC's and of those only had to remove SP2 from 3 machines and this is only due to the fact that we were going to be installing software that was not compatible with SP2.
I would recommend like any other network administrator would to setup a proper testing env if massively deploying this on a network. For a home user I say what the hay go ahead and install it. The only way you will ever lose data is if you reformat, not by applying patches. Even if the system is not bootable you can always pull data off by slaving it to another drive.