Is updating necessary? Short version: Yes!
Here's the comprehensive version:
I perfectly understand what you're talking about: When I installed SP2 the first time I hated it. Performance deteriorated, some things didn't work as expected anymore. Flight Simulator didn't run as smooth as before, that itched me the most. I reinstalled XP with SP1. But I had no internet back then and no USB 2.0. devices.
Then I got internet @home, set up an old abandoned PC for it and deliberately (!) got it infected, just to see what helps and to be motivated to learn about that stuff. Then I bought a router and installed a lot of security software and felt safe...until February this year. I surfed harmless (!) sites and suddenly a browser hijacker wanted me to buy fake software from "Teslaplus.com" and I had some other nasties, too.
But how? All my ports were closed and hidden (firewall plus a NAT router) and my antivirus was up-to-date? This thingie came possibly through the "WMF exploit" - an XP vulnerability that became known a few days before. Malicious code was hidden in images and could be executed, then loading more unwanted stuff. There was no way to prevent this from happening for all that security software!
The only vaccination against this was a patch. That's why hotfixes are so
essential: We live in the era of "zero day exploits" which means that malware exploits vulnerabilities the same day they're found. These vulnerabilites are buried deep in the bowels of XP and no security software can deal with that. Only fixing the system itself helps and that's what SPs, patches and hotfixes do.
A Service Pack is a collection of essential patches. These patches are
"cumulative", they patch the basic system and the updates on it. Sometimes a hotfix takes out some functionality which is reinstated later by a patch, but hopefully safer. If you dont have them all, even old malware can infect your computer easily. Remember, SP2 is from 2004!
"But then I run some software to cure it" you might think... Yes, in most cases the malware is known by some anti-something-software and can be removed. Mind you, the bad guys don't sit on their fingers. "Rootkit" is the buzzword: The point is to avoid infections in first place, because they can't be detected that easy anymore. Only cheap, known and dumb rootkits leave clear traces. My "Teslaplus" stuff incorporated such a "dumb" rootkit: By hovering over the tray icon of the AV scanner I could see that it behaves strange. But the malware actually tried to switch off my AV guard. The essence is: Today's malware attacks security software and tries to hide itself from being detected. This is mostly done by exploiting security loop holes. Whenever such a hole is patched, another one is found and needs another patch.
The good news is: Doing my internet stuff on an old 500MHz machine, I I had the impression that one of the patches after SP2 improved the performance again. A little bit at least.
(Oops... what an opera... :cheesy:)
