Generally, yes, they are safe to install. Every now and then there will be unexpected interactions with things like HP printer drivers, but if you haven't experienced any problems with updates thus far, I wouldn't worry about it.
And I think SP3 is due out in 2-3 months... So, it's up to you if you want to just try limping along until then or if you want to keep going.
Finally, while it is inadvisable to use IE for any extended period of time, I would still install IE7. I don't think you have a choice in the matter any longer as a matter of fact. IE7 marks the start of a turning point at Microsoft with regards to IE. More emphasis on security and standards support. It's only a small step in what will be a very long journey for Microsoft, assuming they don't get distracted along the way, but it's a step in the right direction none the less. So, for those rare times when you may need to use IE for something, it's always best to have the safest one available installed. Just be sure you're using Firefox, Opera, or one of the other non-IE browsers for everything but those rare sites that absolutely will not work with anything else.