I just downloaded the full package of .NET 3.5 SP1 (231 MB) and Visual Studio 2008 SP1, and installed them on my Vista machine. It took about 16 minutes to install .NET 3.5 SP1, and the setup required a restart. It took much longer time to install VS 2008 SP1. After about 1 hour downloading and installing, the setup prompted for the orginial setup DVD. The remaining process took another hour. Nonetheless, the setup was successful at the first attempt.
If you have Silverlight 2 Beta 2 installed, you will need to clean up your machine first before installing Microsoft Silverlight Tools Beta 2 for Visual Studio 2008.
The detail of what's included in the two SP1s is covered in the article, "Visual Studio 2008 Service Pack 1 and .NET Framework 3.5 Service Pack 1".