This is sort of 'last year's news' since the KB article for the update has a date of December 31st, but I suspect many of you weren't all that tuned in to patch releases over the holidays!
The update resolves a number of issues, including some related to topics I've recently presented:
ASP.NET Dynamic Data: In the 3.5 SP1 release, 1-to-1 relationships among entities in the Entity Framework were not supported. There was a workaround posted for this which is now superseded by the SP1 update.
ADO.NET Data Services: Since the ADO.NET Data Services Client did not support creating an entity and setting a reference association (e.g., a foreign key column) in the same step, you could not create new entities if the underlying database schema represented that relationship as a non-nullable foreign key.