That depends, because you seem to have a mistaken impression that once software is launched, Microsoft is making little functionality tweaks here and there. They aren't, and they don't as a general rule, they save that all up for a new release.
Aside from security updates, IE7 is the same as it was when it launched. Which is to say better than IE6 in pretty much every area that counts (rendering accuracy for standards compliant HTML and security) but that's also not saying too much given just how bad IE6 was in those same areas.
SP3 is not some major refresh of the operating system like some people seem to think. Service packs are really just a big collection of security updates. Generally you try and put as few new features into a service pack as you can, because introducing new features into a stable product can introduce new bugs. It's something that should be installed, particularly if you're running around using IE6. But then maybe you like the thrill of being at greatly elevated risk of malware and other forms of attack.
There are two main problems faced by both service packs and new product releases. The first problem is people's general fear of change. People want everything to stay exactly the same, only be better, and hopefully you can see the inherent problem with that. Sometimes you have to screw up a few times before you figure out what works. And you can think that you will let other people be the testers for you, but what do you suppose would happen if everyone decided to wait for the other guy?
The second problem faced by service packs is that people seem to be under this mistaken impression that they are a refresh of the entire operating system. I suppose this whole idea got started with Windows98 Second Edition, but service packs are a whole other beast. Generally they're just a big collection of security updates. Often times, containing security updates not released outside the service pack. They might also contain minor behavior altering changes, like how XP SP2 limited the number of "half open" TCP connections a computer can have. This was designed to limit the effectiveness of self-replicating worms.
But the truth is, Microsoft doesn't really do operating system refreshes like that. Once a product reaches final "gold" status, that's it, they don't modify it. If you buy a copy of Windows 7 the first day it launches, and then buy another copy 6 months later, it will be the exact same thing on that disc. Sooner or later they work in the latest service pack, but it's indistinguishable from a system where you installed the "gold" release and then added SP2 or SP3.
So long story short, just install SP3, be sure you install all security related updates from Microsoft as soon as they're released, and stop using Internet Explorer. Even if you like the thrill of thinking someone could be stealing all kinds of sensitive information off your computer at any moment, it's irresponsible. Malware that latches onto IE like a barnacle can spew out all kinds of spam, cause a system to be part of DDoS attacks, or plenty of other things that make life difficult for the rest of us Internet users. And with the rise in SQL Injection attacks, a lot of the old bits of wisdom about only going to trusted sites, doesn't hold true anymore. ANY site could be booby trapped these days, and there's NO way of telling beforehand. A firewall won't protect you from this, nor will a lot of anti-virus programs. So be a responsible Internet user, and don't use Internet Explorer, or anything based on Internet Explorer, any more than you absolutely have to.