I installed the update (on XP Professional, SP3, IE 7) and everything is still working fine. But I can definitely sympathize with the people who are having problems because last year Microsoft issued an update that completely screwed my HDTV card - and it was more than month before the manufacturer could issue a new driver to fix the problem. But then, Microsoft could care less if one of their updates breaks another vendor's hardware/software. Actually, some people go so far as to strongly suspect that they do it on purpose whenever they break software when/if there's a Microsoft alternative (like, say, Office vs. WordPerfect) that they think people should be using.
And by "some people" I'm not talking paranoid conspiracy theorists on the Internet - I'm talking professionals who write for the various computer magazines/journals...