We just migrated to Arc 10 a couple of days before Service Pack 1 came out. We had some serious issues, including performance issues with ArcGIS Server, Image Server, and IMS. We applied the service pack and took care of most of our problems on the servers.
We did not apply SP1 to desktops or ArcSDE, since we are limited to third-party tools that need to be tested first. But I hope that the problems that we still see on desktops that hit SDE will be resolved after we also apply SP1.
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