When I installed SP2, I made sure I prevented any of Object desktops applications from running. I went into each one and unchecked the box that state "start-up with windows. For Bootskin, I opened and choose the default bootskin. For desktop themes, I right clicked on desktop, clicked on properties and chose the theme of "Windows Xp". After applying that, I noticed that the taskbar was still classic, so I clicked the tab: Appearance, clicked on windows and buttons and it brought up a lot of subsets. I chose Windows XP(you know the fisher price looking one).
I then rebooted to make sure The boot screen and logon screen had gone back to the defaults(go to the application Logon Studio to change that if it hasn't gone to default).
Then I downloaded and installed SP2. The first reboot takes a long time.....don't get impatient. The screen will look like the first time XP did when you first installed it. Mine stayed like that for approximately 5mins. Then it moved to the logon screen and everything was fine. When you log on, it takes you through the new security thing....to set up firewall, notifications etc. After that....
I would reboot one more time to make sure everything is in order. It should boot normally. Then try turning on your applications.
I have not had a problem with them working. Bootskins works great, Logon Studio works great and windowblinds is also without problems.
Hopefully, this will help others install SP2 without problems.