|As long as you're running your system legitimately (ie no dubious software, activated etc.) then there's no reason why not as Service Packs are there to update and fix security holes in the system, along with adding / repairing some functionality (you can check on Microsoft's website as to what is actually installed, I can't be bothered to find it at the moment.)|
The 'don't install' brigade tend to be the ones that either got caught out or resented it when XP produced the service pack that crippled some illegally installed versions. They eventually had to install it simply because most software demanded it.
I still run XP and Vista systems, as well as Win7 and I have always installed updates as & when they appeared with no problems at all. Doing it this way also means the Service Packs themselves are smaller because they also include many previously issued updates, so maybe it's those that don't do ongoing updates but suddenly hit their system with a full SP that have the problem.
"I've always been mad, I know I've been mad, like the most of us..." Pink Floyd