Pretty damn badly, actually.
Against my gut instinct, I loaded SP1 for Office 2008 on my Mac today. I’d heard of wonkyness with the install, but really, those kinda problems only happen to other people, right? Wrong.
After installing the SP and loading Word, I got prompted with the Setup Assistant. I clicked through the defaults and the Assistant quit. I then load Word, got prompted with the Setup Assistant. I clicked through the defaults and the Assistant quit. I lean loaded Word and got prompted with… well, you get the idea.
Googling the problem, I find this thread on the Macfixit site. I deleted the two files, re-launched Word, got the real Setup Assistant and was prompted to re-key in my serial number. Which, naturally, it refused to accept.
I had to uninstall Office and reinstall it to get base functionality back. Good job, Microsoft. Give yourself a cookie.
[Update 7/8: After the reinstall (with my valid, individual serial number) the update worked fine. Not sure what exactly happened]