I have updated my older computers to Windows XP SP3 this week. For additional information on the best way to proceed, see this Microsoft site.
You will likely see XP SP3 offered to you if you are running any previous version or service pack through Windows Updates, if not now, very soon.
Initial indications are there are very few issues and we should all proceed to install XP SP3, but spend the time to read the notes.
I recommend to all who are running XP SP2 with the hundreds of patches to roll those patches up and also enjoy the increased security of the new network enhancements included with XP SP3.