To be technically accurate, your system's Hard Drive is running out of Free Space. This has nothing to do with the system's memory, NeroLigerzid.
SP1 will be found in a randomly named subfolder of Windows\SoftwareDistrbution\Download <--
This article states that SP1 requires slightly over 1 GB of Free Space for the x64 SP1 installation package obtained from Windows Update - Learn how to install Windows 7 Service Pack 1
Since you state you have "downloaded all the updates for Win 7 Ultimate 64bit", suggest you restart the system to first ensure that all of them have installed, then delete the contents of the Download subfolder to reclaim some space. Then use the above article for a guide to reclaiming more space, if so desired.
After SP1 has been installed for awhile and you find that there are no issues
associated with it's installation, then please see this Tutorial to reclaim more Free Space - How To Use the Windows 7 SP1 Disk Cleanup Tool