If you've been waiting with bated breath for XP SP3, you can start breathing normally now. It changes so little in XP that you won't even notice it's there. But hidden and underneath the hood, as I'll explain, there are a few worthy changes.
I'll cover all the high points here. But to get a comprehensive look at all the changes, the best place to go is to Greg Keizer's excellent, all-encompassing FAQ.
The install of SP3 RC2 itself is straightforward. Head to the Microsoft download page, and you'll download a small, executable file that when run, changes your Registry so that you can download XP SP3 from Windows Update.
After that, use Windows Update, and you'll download and install XP SP2 RC2, a 65.6 MB download. After the download, it may take longer than you expect to install --- it took me about 30 minutes or so on a 1.83 GHz Duo Core laptop with 1 GB of RAM. Reboot after the install, and you're in business.
You'll look around in vain to find any changes to the interface --- you won't find any. In fact, just to prove to myself that the install actually worked, I went to the System Properties screen.
This isn't to say that there have been absolutely no changes. Maybe the biggest has to do with product activation and the much-reviled Geniune Advantage. Previous to SP3, when you installed XP for the first time, you had to enter a valid product key, or else you couldn't install the operating system. With SP3, you'll be able to install XP for 30 days without the key. If you already have XP, of course, you won't need a product key to upgrade to SP3.
Apart from that, there are a number of under-the-hood changes, having to do with networking and security. Perhaps the most important of those is Network Access Protection, which is available on Vista and on Windows Server 2008, but until now not on XP. NAP gives network administrators a way to determine a computer's access to network resources, based on the PC's identity, and whether the PC complies with security policies set by the administrator. With NAP, network adminstrators can set this kind of access at a finely granular level. In addition, NAP gives the administrator tools to bring the PC into compliance with the security policies, and then give the PC access to the network. For more details about NAP, check out this Microsoft FAQ.
XP SP3 also rolls up a variety of previous patches and hotfixes. Particularly noteworthy for WiFi users is Wi-Fi Protected Access 2 (WPA2), for more secure wireless networks. WPA2 is already available in Windows Vista and Windows Server 2003 with SP2.
For more details about XP SP3 changes, see Microsoft's Release Notes.
The bottom line? Unless you need to test SP3 for your enterprise, you might not find it worthwhile to download RC2; you might as well wait for the final version. When the final version is out though, it'll be a worthwhile install for a few under-the-hood changes, but not much else.