About 6 months ago I was a little weary of upgrading my Windows Media Center 2004 box with all of the latest Critical Updates from MS so I waited (my brother completely disabled MCE 2004 when he did), but last night I took the plunge and installed everything that Windows Update recommended because I am about to move to Media Center 2005 in my media room and I didn't care this time if I hurt anything. Everything went great, and Media Center 2004 runs fine with XP Pro SP2 installed. I haven't had any problems, and after some tweaking to my video card running through the menu system is much smoother. I am going to upgrade to Windows Media Center 2005 tonight and start looking at the Media Center 2005 SDK.
On a side note, I also got a new Dell Inspiron 6000d with Media Center 2005 preinstalled and I couldn't have made a better decision. That's got to be the best $39 I have spent on a computer (that's all it was to upgrade at Dell).