Hi MarkSk. I can't think of any reason for a reasonably modern PC not to let you install SP2. I've installed Windows XP with SP2 on a fairly old machine with no problem, although some components within the computer can cause trouble. In particular I once had a CD drive that caused the installation not to complete. If your PC has a compatible BIOS upgrade available, then that may be worth installing but it depends on what issues the upgrade was designed to overcome.
That all aside, flashing BIOS is usually quite simple, and the risk of failure is low. The problem is that in the small number of cases where the BIOS flash fails, the result can be disastrous.
Tell us more about your computer and what motherboard it has and we might be able to give more specific advice. Also tell us what happens and what error messages you get when you try to install SP2. Is the problem in installing the total XP with SP2 package, or updating an existing XP installation to SP2.