SP 1 has issues with certain sound drivers (or vice versa) it will either refuse to install or uninstall the drivers first, have you tried re-installing the drivers?
Most people are complaining about it, but to be honest most people are idiots. MS could either give people the option, in which case they'd wet themselves and click cancel, or it'd go ahead, bork the service pack, and the drivers and they'd complain that it doesn't work, then pay PC world a fortune to steal their porn