Yes i would assume that it still works if the demo did.
If anything maybe there is just a couple of little features (graphic effects) that won't show with SP 2
I did a quick google search, all the official websites which have the game available for purchase state that the min. requirements are SP 3.
However, for some bizzare reason, most of the websites which claim to be offering an illegal copy (torrent or rapidshare) say you only need SP 2.
I guess the question is, who knows better - The developers or the pirates?