I’ve just installed Windows XP SP2 RC2 on my TabletPC :) Everything went flawlessly, I just had to download 106 MB through the new “Windows Update” web application. So far, I haven’t noticed any drawbacks. And I’m totally amazed how much better the handwriting recognition has become! It’s really a huge step forward (the videos didn’t quite show this as they seem to have used RC1). Both in English and in German the recognition rate has increased

remarkably (I’d say it’s a solid 95% now). Improvements in ergonomics are great too: Fewer hand-movements are required to input text (it can be entered right below a text-field for example), you can write multiple lines at once (automatically expanded), easily correct errors and easily switch between different languages. I haven’t noticed any issues with too short or too long delays either. There’s still space for improvements however (require fewer clicks, write right inside text-fields through some kind of zooming, display recognized words aligned below the according handwritten words instead of left-aligned, further improve the recognition rate etc.)
Recognition of Chinese characters is much better too. See this screenshot for example:

我孚习汉语 (“I study Chinese” ;)
Entering URLs is no longer a problem and I could even enter a password using handwriting.
I haven’t checked out the other new features and improvements of XP SP2 RC2 yet, but the afore mentioned improvements alone suggest a strong upgrade recommendation for any TabletPC user (note that this is still a beta version though – I’m not liable for any damages/losses whatsoever ;)!
(BTW This whole article has been handwritten – proof enough? ;)
(Addendum: IE finally displays the CSS layout of this blog correctly – an improvement I have been waiting for for a long time :)