This is the slow and boring part, and depending on how you do it, it'll typically mean that your system will be offline for an hour or more. (Get caught up on all those books you keep meaning to read!)
The "Do not turn off your computer" message is absolutely not for show.
|(click for image gallery)|
If you're patching a notebook, plug it into a wall outlet and make sure it has uninterrupted power. Desktop machines should ideally get the same treatment -- i.e., an uninterruptible power supply -- if you can afford it, even outside of this scenario. I live in an area with extremely unpredictable and dirty power, and I don't have anything computer-related that isn't plugged into a UPS.
Once you launch the SP1 installer, the whole process is essentially automatic. You'll confirm a couple of dialog boxes, and then the system will unpack everything, apply the changes, and then reboot several times. During these reboots you'll see a splash screen that says "Applying update X of Y", along with the spinning-circle cursor that indicates something's happening. As long as the drive activity light is on and the cursor is still active, it's still working, so don't touch anything.
The only time you should think about pulling the plug is if the system hangs entirely or crashes. If it does, restart the system and see if it's able to pick up where it left off. A hard hang may be a symptom of an underlying problem that ought to be addressed before you attempt to apply the service pack. Were I in the driver's seat, I'd attempt to complete the patch process, but I'd be wary after that point and would keep my backups close at hand just in case.
Step 4: Verify
After the reboot cycle finishes and you're allowed to log back on conventionally, take the time to make sure that your applications and the system as a whole behave normally.
I usually give a patched system about a week of regular use to shake down any possible problems or changes in behavior. An individual application might suddenly cease to respond or start behaving erratically, although in my own testing (limited to three systems), common programs like Office, Firefox, and so forth all behaved exactly as before. If things run, but not well, take a gander at my article on boosting Vista performance to see if you've overlooked something that might be sapping your system, SP1 aside.
A hard crash of any kind -- a BSOD -- should be taken very seriously. BSODs in Vista are almost always due to a problematic kernel-level driver -- most commonly, a video driver. They have become mercifully quite rare: in my entire time using Vista (a year and change at this point), I've tallied maybe two such crashes, both due to video drivers that needed updating.
If things are consistently unstable, you can uninstall SP1 and see if that changes anything; there may be something that simply isn't playing nice with SP1 yet (or vice versa).
One of the reasons I recommended imaging the whole system (if possible) as a backup solution is because restoring a whole system image is often a lot less complicated and potentially thorny, if slower, than removing SP1 manually. If you want to remove SP1, look for the uninstall option in Control Panel -- Programs and Features -- View Installed Updates.
Note that if you plan to install the production release of SP1 on a system that had a beta or release candidate of SP1 installed, you must remove the old version of SP1 first.