For most people the issues with .NET 3.5 SP1 are likely manageable. You can install it and work around the problems. Or you can hold off until they fix the issues (and they really had better fix the issues).
And then there's the guy in this thread who must install .NET 3.5 SP1 to use SQL Server 2008, but can't install it because it breaks what he's doing with WPF (running it in a service). I'm really really glad I'm not him. Moreover I'm disappointed and annoyed that Microsoft hasn't paid any attention to people using their stuff in unusual ways. In an industry with such a rich history of taking things and using them in places their original creators never imagined; for a vendor the size of Microsoft to never consider people may not use their tools exactly as they expect is fairly damning. Improvement required.