Here's an excerpt from Notable Changes in Windows 7 and Windows Server 2008 R2 Service Pack 1.doc
Changes specific to Windows 7
Additional support for communication with third-party federation services
Additional support has been added to allow Windows 7 clients to effectively communicate with third-party identity federation services (those supporting the WS-Federation passive profile protocol). This change enhances platform interoperability, and improves the ability to communicate identity and authentication information between organizations.
Improved HDMI audio device performance
A small percentage of users have reported issues in which the connection between computers running Windows 7 and HDMI audio devices can be lost after system reboots. Updates have been incorporated into SP1 to ensure that connections between Windows 7 computers and HDMI audio devices are consistently maintained.
Corrected behavior when printing mixed-orientation XPS documents
Prior to the release of SP1, some customers have reported difficulty when printing mixed-orientation XPS documents (documents containing pages in both portrait and landscape orientation) using the XPS Viewer, resulting in all pages being printed entirely in either portrait or landscape mode. This issue has been addressed in SP1, allowing users to correctly print mixed-orientation documents using the XPS Viewer.
Changes common to both client and server platforms
Change to behavior of â€œRestore previous folders at logonâ€ functionality
SP1 changes the behavior of the â€œRestore previous folders at logonâ€ function available in the Folder Options Explorer dialog. Prior to SP1, previous folders would be restored in a cascaded position based on the location of the most recently active folder. That behavior changes in SP1 so that all folders are restored to their previous positions.
Enhanced support for additional identities in RRAS and IPsec
Support for additional identification types has been added to the Identification field in the IKEv2 authentication protocol. This allows for a variety of additional forms of identification (such as E-mail ID or Certificate Subject) to be used when performing authentication using the IKEv2 protocol.
Support for Advanced Vector Extensions (AVX)
There has always been a growing need for ever more computing power and as usage models change, processors instruction set architectures evolve to support these growing demands. Advanced Vector Extensions (AVX) is a 256 bit instruction set extension for processors. AVX is designed to allow for improved performance for applications that are floating point intensive. Support for AVX is a part of SP1 to allow applications to fully utilize the new instruction set and register extensions.
Improved Support for Advanced Format (512e) Storage Devices
SP1 introduces a number of key enhancements to improve support of recently introduced storage devices with a 4KB physical sector size (commonly referred to as "Advanced Format"). These enhancements include functionality fixes, improved performance, and updated storage drivers which provide applications the ability to retrieve information as to the physical sector size of storage device. More information on these enhancements is detailed in Microsoft KB 982018.
In addition to all of this, it contains all of the previously-released Windows Updates in addition to some new ones.
Personally, I decided against installing it because it doesn't offer me anything I want or need. Plus, it sounds like it will be installing previously-released updates that I specifically avoided.