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Because service packs include fixes that often affect performance (among other things) you should upgrade your SQL Servers with the most recent service pack when it becomes available.
In some cases, service packs affect how the Query Optimizer performs. Because of this, some queries that were once slow may now be faster. On the other hand, some queries that were fast may become slower. Because of this, after installing any service pack, you need to be aware of the above possibilities, so that you can deal with them as appropriate. Specifically, keep in mind that hints used in some queries may no longer be needed once a service pack added, so keep a close eye on them after it is installed.
But, as any prudent DBA knows, you will want to thoroughly test the newest service pack before installing it on your production servers. [6.5, 7.0, 2000, 2005] Updated 11-15-20005
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Sometimes you need to find out which service pack version you are running on SQL Server. First, run this command in Query Analyzer or Management Studio:
SELECT @@Version
Or
SELECT SERVERPROPERTY('ProductLevel')
Once you have the version number, then match it to the list below to find which SQL Server service pack you are using.
[6.5, 7.0, 2000, 2005] Updated 11-15-2005
To find out the current level of SQL Server Analysis Services, start the Analysis Manager, right-click on the Analysis Servers node, and select "About Analysis Services."
[2000] Updated 11-15-2005