I installed SP3 the other day on my XP professional laptop and did not have any problems. I heard rumors that SP3 was causing problems on certain AMD machines, but this was systems coming pre-installed with XP from
Dell or HP because they pre-install the same image of XP on computers whether they are AMD or Intel processor systems. The problem with this is there is a certain Intel driver that gets installed on AMD systems and while SP1 and SP2 allowed this Intel driver to work on AMD processors, something with the new SP3 modifies this and requires the correct AMD driver to be installed and not the Intel driver. I haven't heard how HP has been trying to fix this at all, but if you installed XP yourself or have a different brand then you should generally be in the clear from what I hear.
I haven't noticed much speed increase or performance stability upgrading to SP3, but it has gotten slightly faster at startup.