text: It should not affect any of your files or programs.  Over the last year, I have upgraded at least 20 PCs where I work from SP1 to SP2 and have had no problems.  When SP2 first came out, MS offered a free CD-ROM to make it easier than using the download off of the site.  They still have it offered as part of windows update, but it takes a long time to download, even over a high speed connection.  With windows security being was it is, you are best to do the update.