ISO files are image files used to create CD's or DVD's. When one has an
iso file, one must use a specific type of burning to create the CD. IOW,
you cannot just burn the iso file as a data file, but must use a
different method to burn that iso and the way disparate utilities burn
iso's depends on the specific burning utility.
So... the iso file's deal is... download iso, burn to CD or DVD, use
that CD or DVD on one or more computers to upgrade to SP1.
The exe file's deal is... download the exe, run it from your desktop and
upgrade to SP1.