It has been a nightmare installing SP2 onto our Dell 4400 computers.
The problem is corrupted hard drive reads.

At first everything seemed to work ok but then:

1) After a few minutes, a 1 MB text file of source code would not compile because one letter has been changed.
2) An hour later, one EXE program kept crashing.
3) I noticed a GIF image was slightly corrupted.
4) The icons had to be rebuilt on bootup.
5) There were many warnings about "Registry was Recovered" on bootup.
6) IE began to crash on certain web sites (google).

7) Many programs began crashing.
8) The computer finally refused to boot even into safe mode until CHKDSK was run.

 

We made sure the computers were free from viruses and spyware.
We did the BIOS upgrades from Dell.
We even installed a virgin windows on a new hard drive.
We attempted several uninstalls and reinstalls with different Bios settings.
The same problem always persisted to variable degree.

 

We phoned Dell technical support and were told SP2 should not be installed on Dells until Microsoft gets the bugs ironed out.

We did some technical investigation and determined that SP2 is forcing the IDE hard drive controller from UltraDMA mode 5 to mode 6.  The Intel 845/ICH2 chip set in this model is not capable of mode 6, so we assumed this was the cause of the problem. Our Dell models 4550 stayed at mode 5 and SP2 works great.

After a lengthy call to Microsoft tech support, we were told if SP2 forces the mode from 5 to 6, its because SP2 needs it at 6, and there is no way to put it back to 5.  If we suspect this mode 6 is corrupting the hard drive, then we should forget about SP2.

The IDE mode can be checked at:
Control Panel> System> Hardware> Device Manager> IDE...> Primary...>

 

Finally we have come up with an easy solution that has completely solved this problem:
We installed the Intel Application Accelerator available at
http://support.intel.com/support/chipsets/sb/CS-015001.htm

This replaces the Microsoft IDE driver with the Intel one.
The UltraDMA mode now stays at 5 and SP2 is working great on these Dells.
The computers seem faster than ever!

This fix works even after SP2 is installed, but its best to do it before SP2.

 

I hope this helps other people who are having similar flaky problems with SP2.