A service pack is the name for a collection of updates, fixes and/or enhancements. Many companies typically release a service pack when the number of individual patches to a given program reaches a certain (arbitrary) limit. Installing a service pack is easier and less error-prone than installing a high number of patches individually, even more so when updating multiple computers over a network.
The most well known service packs are those by Microsoft, i.e. those for Microsoft Windows and Microsoft Office. These service packs are typically numbered by order of release, e.g. SP1, SP2, etc..