YES – it can and should be installed on SBS 2011 Standard edition.
What about SBS 2011 Essentials ? – Great question – It is already part of Essentials out of the box.
Please be sure to back up your server before installing any update.
A good rule of thumb is that if the patch or service pack is offered to your SBS server on Windows Update, it is supported to be installed on SBS. The SBS SE team reviews patches and service packs before they are offered to SBS servers.
For more information on Service Pack 1 for Microsoft Server 2008 R2 – Check out TechNet – http://technet.microsoft.com/en-us/library/ff817647(WS.10).aspx