Security worries

I won't be installing Service Pack 3 for Windows XP on my computer due to the EULA, which says it can periodically tell Microsoft all about my computer "to prevent piracy". Screw that. I spend enough effort keeping spyware off of my system; I'm not going to have it in my OS. I didn't allow WGA onto my system, and I'm not allowing SP3 either if it's going to do the same thing. I am kind of worried, though, that this decision may make me vulnerable to security holes. This may lead to my switching to Ubuntu.