The best way how to install WinXP-SP2 is clear installation(you have to import SP2 to installation CD - to find how to do this check Microsoft's MSDN. This is "self-made" CD installation.
Of course, SP2 can be installed as an upgrade to SP1(it's purpose
), but be carefull. When upgrading SP2, SP2 makes records(backups) of changes(for future SP2 removing - if needed). But from my personal experiences (and I am not beginner in this), when you will try to deinstall/remove SP2 there is 85% chance that your system will be corrupted.(I tried it 4 times - 3 virtual machines and 1 normal system - shit I had to reinstall my comp
- god bless DVD-RAM backups
). But if you do not intend to remove SP2 it is true safe.