Seems like it breaks a lot of stuff: http://www.microsoft.com/en-us/dynamics/crm-customer-center/readme.htm
SP1 does not break lot of things , it added lot of new functionality to the CRM. Whether to apply SP1 or not is upto you based on your requirements. If you want to make use of new functionality that got introduced in the SP1, go for it and i did not see any so stopper issue in the SP1.
Oh, ok. I guess I was just looking for any feedback from on-premise users who have installed it. Anything to watch out for? Anything that is a must-have?
We have more than 15 on-premise customers with SP1. We provide support to our customer issues and so far we never received any major issue that is caused by installing SP1. I know there few issues that are addressed in rollup 3 and those fixes are not in SP1.
I would suggest you set up a CRM 2013 Dev server and install SP 1 to test and explore its features there. If everything looks good then you can deploy it on your production server.