I am not upgrading until they get this crap fixed. There is no excuse for releasing garbage with that many issues. Neither am I. I'm hearing that SP2 will scramble SQL Server and Visual Studio.NET. And I'm not in the mood to shell out another $1600 for an upgraded version of either one.
I get the sense that Microsoft is setting itself up for a fall in the same way IBM did in the 80s. I don't know if Linux or some other OS will challenge MS, but I do know they're ripe for a fall.
Here's an article that discusses what to do regarding SQL Server and XP SP2:
Windows XP SP2 Defaults Break SQL Server Connections
Here's another article on how to enable remote debugging between Visual Studio and another XP SP2-firewalled box:
Description of the DebuggerFirewall utility that makes the Visual Studio Remote Debugger work through the Windows XP Service Pack 2 firewall
As for whether MS is "ripe for a fall", I can only say that these changes were absolutely necessary. One of the reasons why Code Red, Nimda, and similar worm variants were allowed to propagate is because of unpatched SQL Server boxes and unnecessarily exposed ports. Microsoft is taking a broader approach to security than just applying individual patches. Vulnerabilities in SQL Server and other server products can be devastating. You, as a server admin, need to be aware of how deploying these servers impacts security on your network. It isn't good enough anymore to simply deploy a server and roll the dice. Microsoft (rightly so) has taken the brunt of complaints for this in the past. I don't blame them for trying to address these issues NOW. Yes, this creates some short-term pain. Admins are going to have to become more knowledgeable about what they're deploying on their networks -- and how it affects network security. But in the long run, we will all be better off.