This has been covered in the blogosphere pretty heavily now, but maybe a little bit more will help prevent the next accidental "discovery" of the issue.
The following was sent to me from Paul Chen, and he asked me to post it for him (he's too busy fielding e-mails on this topic ; )
Folks, some members in the community have reported System Center 2012 SP1 Update Rollup 1 breaking Service Provider Foundation (SPF) connectivity with Service Management Portal/API. Unfortunately this is a known issue and the listing in the Knowledge Base article 2785682 was difficult to find. Fortunately the issue can be easily addressed. The cause of the issue stems from how the update package is applied onto an existing SPF installation, in particular the VMM endpoint Application Pool identity setting. The update by default essentially resets the identity to Network Service account. To fix this issue, open the IIS management console and set the VMM endpoint Application Pool account to the domain account you had set previously. On behalf of the SPF team, we apologize for causing this inconvenience. On the positive side, UR1 brings you the much needed capability of metering tenant VM usage. As most folks are using Service Management Portal the KB article also describes how you can hook up the metering capability to get a single view of usage across all services. This is definitely exciting news for you service providers to be able to gather usage metrics for billing enablement.
You can find the details on known issues and how to remediate in this KB article http://support.microsoft.com/kb/2785682/en-us. Because System Center is comprised of many components, you’ll need to scroll down and look for the Installation Instructions section and expand Installation instruction for Service Provider Foundation.
Special thanks also to Hans Vredevoort and Marc van Eijk for their continued support of the community by jumping on these releases right away and blogging actively to keep people informed.
Nice work fellas.