It'll run without SP1. I installed SP1 the first time I installed TS2009 and have had problems.
So I decided to uninstall and reinstall without SP1 today to see what would happen.. So far it hasn't been bad. Good frame rate, but every few minutes, it'll suddenly freeze for a second.and start running again. I'm using OpenGL.
If you're running Windows XP, it's been suggested that SP3 for Windows be installed.