Starting with SQL Server 2008 SP1 you can “slipstream” SP1 and/or SP1 + SP1 based CUs to avoid a multi-step installation process.
To install a slipstreamed instance with SQL08+SP1+SP1-based-CU5 I followed these steps based on the above blog by Peter Saddow:
1) You will probably want to rename the directory (and therefore update the CUSource entry in the Defaultsetup.ini files) to indicate exactly which CU you have slipstreamed.
2) Instead of the blog reference in his step 1, you can optionally follow the more official KB 955392, choosing option/procedure 2 (Create a merged drop) to create the slipstream files of RTM+SP1.
a. To make sure I got the commands exactly right I cut/pasted them into a .cmd file and ran that.
b. Do NOT do step 7 “Start the Setup program” because you still need to add the CU files.
3) Download your CU of choice which is likely different than what is listed in the blog. For SP1 based CU5 you will download the first file (SQL_Server_2008_SP1_Cumlative_Update_5) from http://support.microsoft.com/kb/975977.
4) For CU5, run 399273_intl_x64_zip.exe, 399273_intl_ia64_zip.exe, and 399273_intl_ia64_zip.exe to extract the files SQLServer2008-KB975977-{architecture}.exe (which are the actual setup files for each architecture). You will need the password from the hotfix email you got from the 975977 link/email.
5) In the blog’s step 4 which tells you to extract files from the setup files, use your actual KB number. For SP1-based-CU5 the KB is 975977 so the commands will be SQLServer2008-KB975977-{architecture}.exe /x:c:SQLServer2008_FullSP1_CUCU
6) Run setup with the “run as admin” option on Windows 2008/Vista/Windows 7.
7) If you later move the setup files to a different location you will need to update the Defaultsetup.ini file in each of the architecture directories (x86, x64, ia64).