This update to Windows 7 is free to owners of the operating system. So if you do not own a license for Windows 7, you would need to purchase one before you would be able to get SP1. This may mean buying a pre owned license, as Windows 7 is no longer sold.
SP1, which is short for Service Pack 1, is an important update to Windows 7 which brings a number of stability, performance, and most importantly, security improvements to the operating system. It is a crucial update if you are still running Windows 7, as the operating system is old and vulnerable to attack.
An ISO of the SP1 update is merely a disc image of the update's physical media. Simply put, a file of a CD or DVD. The file itself cannot be used with special software. You would then either "mount" the ISO or burn it to disc, depending on your needs.
The easiest way to install SP1 is to enable Windows' automatic updates and let Windows take care of it. Otherwise, you can download the installation files from the Microsoft website, then simply follow the instructions. Be sure to choose the right version of SP1 (32 bit or 64 bit) for your system.
If your machine came with Windows 7 SP1 pre-installed, unfortunately it cannot be removed without a completely fresh install of a none-SP1 version of Windows. Otherwise, you can uninstall the update using the Programs and Features section of Windows settings. The update is labelled KB 976932. Simply highlight it and click uninstall.
To check if you already have SP1, you need to look at your computer's properties. The quickest way to do this is to right click "My Computer" and select "Properties". This should bring up your system information. If it says "Service Pack 1" in the Windows Edition section, you have SP1.
SP1 (otherwise known as Service Pack 1) is not an operating system itself, but a free update for the Windows 7 operating system. This means that you do not need to activate it. You will need a licensed copy of Windows 7. If you do not own one, then activation will be required.
The repair for a Windows 7 installation with SP1 varies depending on the problem. In general, trying the "Last Known Good Configuration" boot option is a handy tool. After that, you could try System Restore to restore to an earlier point when all was fine. A fresh install is also possible.
Windows 7 is now an outdated operating system, but it is still very popular. This means that it is targeted by malicious people more, as it has a wide user base and is more likely to have security holes. If you run Windows 7, you should absolutely install every update they release.
Any update for an outdated operating system such as Windows 7 that includes "security improvements" should be considered a critical update. Not installing security updates on Windows 7 could leave you vulnerable to infection from malicious software or people. SP1 is included in Windows updates, and should be installed at the earliest convenience.