Microsoft's take on the subject:
Windows 2003 service pack 2 known issues on Small Business Server 2003.
I have been watching closely via RSS and Google searches for issues with the Service Pack on SBS.
By default, we do not install any service pack out of the box. We wait to see what the rest of the world is doing with it.
We also SP some of our virtual production imaged boxes. And, inveritably, they choke.
Nothing has really changed in all of the years of working with SBS and the standalone product's service packs. Test them first to see what happens, and verify with others out there that things won't break.
Virtualization makes this very easy to do. After obtaining permission from a client, retrieve a backup via USB drive and recover it virtually.
This tests your recovery skills, and it also gives you a production box sans data to play with.
Microsoft Small Business Specialists