I was just refering to installing SP1 as a matter of course... It's easier using the 'Standalone version' as you don't have to have the required updates first (as they're included). I think SP1 at the last count had around 500 fixes, the kernal is rewritten and file loading/copying is faster. Also if you run an ATI card SP1 provides support for Direct X 10.1 (although no games currently support this apart from Assassins Creed )
When I reformat I first install vista and then the service pack. I do this before I put any drivers on ect as I think it's the best way to apply service packs... Especially how this one rewrites the kernal some-what..