You said you have Microsoft Security Essentials, are the definitions up to date? I run that too and updated it before running the SP1 update. When I did my update I did not turn off Microsoft Security Essentials and didn't have any problems.
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I suggested that he disable or uninstall his AV because there have been issues with service packs for XP and Vista. Wasn;t sure if it was the same with Win7 SP1. I have McAfee on 1 PC and the Microsoft Security Essentials on the other ones I installed SP1 on; neither AV had issues with the install.