I don't think you can go to WinUpdate with SP1 and update to SP2 anymore.
I just went to the WinUpdate site and verified that.
But you can download SP2 from http://www.microsoft.com/downloads/details...;displaylang=en
Ignore all the rhetoric telling individual users to use WinUpdate.
As for your question, either method will work, after you install the SP2 package onto your SP1 version of XP. Actually, it's probably faster that you cannot download SP2 at the WinUpdate site any more.
I suggest making a slipstreamed CD (sometime shortly after, if not before, doing the install). The primary reason is that, if you should desire to run sfc /scannow (to replace system files) or do a repair install of XP, it will expect/demand a CD that contains SP2. This does not have to be done immediately, but it probably should be done.
I guess that I haven't the slightest idea what you are talking about when you refer to a "network plugin." But I'm sure someone else does and will come along to give you their opinions.