When I posted about Service Pack 2 for Windows XP I said I was going to wait until someone else verified it doesn't screw up the development tools I use.
Well Nick Bradbury, who wrote FeedDemon (the best RSS reader that exists)and TopStyle Pro (the best CSS editor that exists PLUS one of the best HTML editors around), programs in Delphi as do I. And he says:
Last night I created a VMware virtual machine for the new Windows XP SP2 in order to test both TopStyle and FeedDemon with it, and I'm relieved to report that they both work fine.I'm not so relieved, however, to report that installing SP2 on my development machine didn't go so well. After installing SP2, rebooting then logging in, I was greeted with a blank desktop (no taskbar, no icons, no nothing). Lucikly, I was able to hit Ctrl+Alt+Del to get to task manager and launch apps from there, but after troubleshooting for a few hours I gave up and simply uninstalled SP2. If you're planning to install SP2, I hope you have better luck than I did!