Will I lose files if i update to vista sp2?

Depending, if you are going to do a fresh install of Vista SP2, then yes. Fresh install will wipe out what ever you have on your storage device (ex: hard drive).

If you are just updating from your current Vista as of now to SP2 then no. Everything will be kept, but just in case, backup what ever you have to a USB memory stick or burn the data onto a DVD. Sometimes updating from SP1 to SP2 will make an old computer, sometimes new ones unstable and will just crash the system while updating to SP2.

Technically no. But stuff happens and you should back up everything anyway. Frankly you should have every thing backed up already anyway. Hope this helps. Good Luck.

"Ralph" gives the most solid advice.
Any kind of broad drive mod's should have immediate backup prior to commencing work (and a routine BU strategy in place.)
Note that Dell has some hardware issues with the Vista/SP2 install with not-so-good outcomes; maybe others.

Nope.

Of course not