In addition to the above, follow rule #1 for upgrading your operating
system: Don't upgrade over a problem. If your copy of Windows has
problems, fix them /before/ you upgrade.
To your question: Sooner or later without it you will not be able to install
additional updates as they will require SP3 or later. It is entirely
possible that some third-party applications will also come to require
Windows XP SP3 or later to work.
To your comment about SP3 being risky... It is less risky than walking
around in many ways - since you can make full backups of a computer and not
lose any data/anything where you cannot do that with yourself. ;-)
Most people have no issues installing SP3 onto their Windows XP 32bit
computer. You see them in this newsgroup (those with issues) because this
is where people go who have issues. ;-)
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