Linked by Eugenia Loli-Queru on Thu 2nd Sep 2004 19:56 UTC, submitted by Jon Cooper
"We evaluated the security features of Windows XP SP2 on a test machine, following a clean install of XP Pro with no configuration changes and no third-party software or drivers installed. We installed XP with the NTFS file system, choosing all of the factory defaults, then patched it with each recommended security update including SP-1 (required), before installing SP2." Read the rest at TheRegister.
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Regarding the "DNS client", it's a badly named service. It is actually a DNS caching client. Disabling it does not disable dns lookups, it disables dns caching. You can still browse the internet no problem. Instead of looking locally, every name lookup will result in a round-trip to your dns server.
Go ahead and disable it - you'll see for yourself name resolution still works.