A common question from customers; should we apply SP2 or wait.

There is no Golden answer; I would suggest:

a.      Test the application in testing / staging environment first

b.      Compare the performance against baseline

c.       Refer to wonderful blog article from SQL PSS team - that explains the details about the re-release of SQL Server 2005 SP2 and post release fixes.

I would say this is a must read for anyone deploying SQL Server 2005 SP2 to understand the various hot fixes, GDRs and procedures.

SQL Server 2005 SP2 Re-release and post fixes

From typical DBA perspective I would recommend check

http://support.microsoft.com/kb/934458

http://support.microsoft.com/kb/934459