which one is far better XP2 or XP3?

Since that is the latest that Windows XP has to offer, you need to go with service pack 3. There are security updates since there are a lot of holes in the Windows Operating System and Microsoft is trying to patch the holes up through these updates.

Hey, I think that Windows XP Service Pack 3 is the best one, logically seeing that Microsoft wouldn't release a Service Pack that is worse than the previous one they had. It also has some security issues fixed. Make sure you have a good day, Happy Lotting!!

To be frank, Its always better to go for the latest version of service packs. You will understand it better if I tell you than the mechanisms behind those service pack releases. Windows releaes a OSs,see there is nothing in the world without craps or errors,yeah there will be some craps(tiny errors) in those OSs relesed by WIN.They will rectify all these errors and they will release the corrected version as new service packs.(sometimes with updates of latest features and security updates). Coming to your point, WIN Xp SP3 would be my suggestion...

I would also choose Service Pack 3. It has security updates and also some little improovements. But before you install - safe your data. Something can always go wrong.