Where Vince said "if it ain't broke", I feel he was referring more to creating an SP3 Recovery disk, rather than installing the SP3 update. If you need to do a recovery, the something major has gone wrong anyway and you need to reinstall your Operating System, (OS), and then reinstall any other software that you installed manually previously. SP3 might just as well be installed manually as well as the other software. But slipstreaming the OS with SP3 is perfectly acceptable. Google will help with Slipstreaming.
But why should you update to SP3? It adds nothing particularly new. I have seen one or two changes, but these are minor things that do not affect the normal running of the OS. For example, the System Configuration Utility, (Start > Run, type in msconfig, click OK), appears to have a new "Tools" tab. At least, I never saw it before SP3.
It adds nothing new, but it consolidates all of the updates installed on your system since SP2, which was the major upgrade. There are some other minor changes, updates that would normally have been issued separately, but instead were issued with SP3. Now we move on to SP4. All new updates since SP3 will, eventually, be incorporated into an SP4, and so on.
So, it is a tidying up process, and it allows your system to continue to receive post SP3 updates without having to continually reject SP3 itself.
For the sake of the OS and keeping it up to date and running smoothly, I believe you should update to SP3.
Like Vince says, preparation is the key. A trouble free system is essential, a bit of housekeeping, and, (just in case), carry out all your normal backup routines for those personal files you cannot afford to lose. That's standard advice.