It's the greatest thing since sliced bread for administrative installs.
If you make an administrative flat of a program, which is a central distribution folder usually on a server, you can "slipstream" the service pack onto it. That means the service pack updates the installation files so that any new install done from administration flat will now come with a service pack / hotfix.
For example I create an admin flat of Office 2000 (original release) in E:\Apps\MSOffice2k Now I run the Microsoft Service Pack 1 and choose to update the install at E:\Apps\MSOffice2k. Any install from this point on will place Office 2000 SP-1 on my workstations.
Also you can have people who have the prior release now run the install and update to SP-1. It really works great.
HTH,
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Citadel