SP1 is not offered if WU detects problem drivers. Nothing to do with MS
being idiotic at all, quite the reverse.
Problem drivers were not the problem in my case. I had seen a few
updates that needed to be installed from Windows Update the last
couple weeks, but didn't bother to install them (SP1 was not one of
them). And the computer is configured to automatically install
updates every day, so I don't know why Windows didn't install them
automatically. I finally installed them tonight, and then went back
into Windows Update, and that's when it finally showed SP1.
Apparently it doesn't show SP1 until after you've installed all the
other updates. I think that is different behavior than Windows Update
on previous versions of Windows.