You can't use the old trusty method of slipstreaming service packs into your Windows install CD with Vista. But we've figured out how to do it anyway.
If you're someone who has to install Windows frequently on PCs from time to time, there's nothing more annoying than having to install the release version of Windows, then run Windows Update repeatedly and wait for all the patches to download. In past versions of Windows, though, it has been relatively easy to build an updated version of the installer CD, with all the latest patches included. Unfortunately, that's not the case with Windows Vista or Windows Server 2008, which both handle patches and updates differently compared with previous versions of Windows.
The new Windows kernel features a "servicing layer", which allows for more streamlined handling of patches and updates with minimal disruption to the user and reducing the need for multiple reboots. However, SP1 updates this servicing layer as well as the OS itself, which makes a slipstream integration procedure like that which we can use for Windows XP SP2 and SP3 not possible.
It sort of makes sense - when you install SP1 there are a couple of reboots and you can see the OS applying updates before it loads the desktop or any other user interface. There's plenty of work going on under the hood, and most of it happens before Vista loads back into the GUI.
You can get more information on the servicing layer and its implications for slipstreaming here.
Slipstreaming SP1 into your Vista install DVD despite the challenges
So officially, the only way to integrate SP1 into Windows Vista WIM is to install Vista on a system, install SP1, and then capture the entire image back to a WIM which you then insert back into your installation source.
Sounds like fun? Of course not. There has to be an easier and more accessible way - and thankfully, there is. An enterprising German software designer going by the handle of AlbertS2 has developed an incredibly nifty tool which deserves a LOT of praise and attention.
Called "Vista Update Integrator", it's a .NET application which lets you inject drivers, language packs, updates and service packs straight into a Vista WIM, and then recompiles the whole thing at the end, even giving you the option of creating a bootable ISO. Although it's still in beta (this how-to was written based on 1.0 beta 5) and is a work in process, it functions very well and provides a one-stop shop for admins and enthusiasts alike. It's also a perfect alternative for those people who are using Vista more and more and want to keep an install source up to date, but who haven't dived into the powerful but confusing depths of Microsoft's suite of deployment tools.
Read the full article @ http://apcmag.com/how_to_slipstream_vista_sp1_into_your_vista_install_dvd.htm