I found an old article that talks about some of the issues I brought up about Longhorn's long time-to-market date. Steve Gillmor mentions a possible “Longhorn Lite,” which is what I was getting at with my XP2 idea.
I saw another article which talked about releasing some improved security features with Service Pack 2, but I would encourage Microsoft to include all of this in XP2. The more that is in that version of the OS, the more likely people will want to upgrade. And, as far as SP2 goes, I believe that's about the time frame that I was talking about for an XP2 release (end of 2004).
Hopefully, Microsoft is listening.