This was not made to be your only stop for checking out the new stuff in SP2. Ars had the best coverage of the new features that I found. To go on top of the obvious stuff that the other sites have covered I'll try to give you some extra info. This may have some pieces that are more technical than you want to read.

Bluetooth support
Previously third party applications brought bluetooth support. Now Microsoft is offering it from them.

Windows Installer 3.0
"Windows Installer 3.0 provides the underlying infrastructure for software distribution systems to target and install updates to Windows Installer-based applications. Enhanced inventory functions make it possible for administrators to detect products, features, components and patches across user and installation contexts. Three new functions are provided to determine if a patch is necessary prior to downloading the complete patch payload to the target computer."

Basically MS is setting things up for automatic updating of all the applications on your system. Not only that, but it'll only grab the updates that YOU need. MS also thinks this will deliver smaller and more reliable patches.

Setup authors can use Windows Installer 3.0 to create patch packages (which have the .msp file name extension) that use Microsoft's delta compression technology. Delta compression uses binary file differences instead of using the full file, which significantly reduces the patch payload.

You will also now be able to remove a patch. In the past I've seen patches make a game quit working properly for me and I couldn't just uninstall the patch. I had to uninstall the entire game! With WI3 you're supposed to be able to uninstall the patches.

Under add/remove programs I see a check box at the top that says show updates. Currently the only thing that does is show me the various SP2 updates I've installed. As more programs use WI3 we'll see what all this does.

It is also supposed to create non interactive installers so all people will do is open the installer and it installs! No more clicking next, OK etc several times. I'm interested in seeing this in action.

Security Related

With the firewall you will have to have administrator acces to be able to tell the firewall to allow something to access the internet. Now your kids will have to ASK before they can start using some crappy chat application.

Alerter and Messenger Services Disabled
In previous versions of Windows, the Messenger service is set to start automatically and the Alerter service is set to manual start. In Service Pack 2 for Windows XP, both of these services are set to Disabled. If you want to use these services go in and turn them on.

Ports blocked
If you run into problems with this here's how to fix;
At the command prompt, type netsh firewall set portopening TCP 445 ENABLE and then press ENTER.

Here are some other blocked ports 445 is the only one that you might want to open. These are used in file and printer sharing.
UDP port 137
UDP port 138
TCP port 139

Boot time security
In earlier versions of Windows, there is a window of time between when the network stack was running and when Windows Firewall provides protection. This results in the ability for a packet to be received and delivered to a service without Windows Firewall filtering and potentially exposes the computer to vulnerabilities. This was due to the firewall driver not starting to filter until the firewall service was loaded and had applied appropriate policy.

IE's Addon manager

There's also supposed to be something called crash detection, but I haven't been able to trigger it so I'm not exactly sure what it'll do.

Disable Crash Detection
HKCU{LM}\Software\Policies \Microsoft\Internet Explorer \Restrictions

NoCrashDetection : DWORD
0
0 - Off,

1 - On

FTP and gopher dropped
These protocols have been removed from the command prompt. If you want to use them install a third party program to do so. This is a security related fix that should have happened a long time ago.

WinHTTP now in use
http://msdn.microsoft.com/library/default.asp?url=/library/en-us/winhttp/http/about_winhttp.asp

WinINet is the name of the old one. I won't pretend to know the differences other than the above services are no longer supported. Read the MSDN page if you want more info.

Outro
We should be seeing the official release of this sometime in the next couple of months. The release date still says mid 2004. Beta started sometime last year. The main focus of this service pack is security.

Microsoft has created an online training course that details the implications of installing SP2 on Windows XP machines. The course covers the impact on existing applications and includes code samples. (http://msdn.microsoft.com/security/productinfo/XPSP2/default.aspx)

Microsoft's Visual Studio .Net is will not be fully function with this SP. The developer tool's remote debugging feature won't work because of the Firewall. Another MS product that'll break is the .Net Framework. It'll only break in the Itanium and AMD64's with memory protection turned on.