ANSWERS: 2
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Service Pack 2 and Service Pack 3 contain most of the critical updates that appear on Windows Update for SP1, not all but most. I recommend installing SP2 and then SP3. After that install the remaining updates which are much fewer in number than if you didn't install SP2 and SP3.
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there are some elements which will need updating before you can get on to SP2 - BITS, the Windows Installer and the Validation tool are three I can think of - however, it all flows along on its own. With SP1 on you will probably have to initiate the update procedure by going to Windows Update website yourself to initiate it ( click on Control Panel and then click Windows update on the left), but once you have the BITS and stuff in place, and you set the machine to automatic updates, all the rest will come along in its own order, until you get to SP3 and IE7, and even then you may have a few more updates for the updates before you are fully up-to-date.
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