I've often downloaded service packs and then run them, rather than run them "live" though update. I normally do this if I have more than one system i need to update as it removes the need to download it again on each machine. However, for some reason I didn't do this with Win 7 SP1. Not sure why, but for me it worked OK.

Regarding the SATA card, it differs between the different cards. I've not used many addon SATA cards, however with ATA and SCSI cards it was always the cards own BIOS that was an issue with boot recognition and drives being recognised. Some BIOSs support specific conditions and others don't. So it might be worth checking the card's maker to see if they have any card firmware/BIOS updates that might help.