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You can go on confidently with Firefox. Security issues and problems are generally solved much faster by them than by MS, and are fewer. Firefox is also not equally integrated with Win as IE, thus narrowing down the possible sources of trouble in the coding process somewhat.
SP2 is a Windows service pack. As IE happens to be a part of it, problems pertaining to it are also addressed. Therefore SP2 should be downloaded regardless of whether or not you use IE, unless you have some specific reason not to.
It's actually quite a big patch.
HTH
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