Orca (the merge module file viewer and editor) updates a file's date/timestamp whenever it opens a file, even if no changes are made. A consequence of this is that if you opened vfp7runtime.msm or vfpoledb.msm in Orca on or after 1/5/2002, whether or not you made any changes, these files will have a date/timestamp that is newer than the corresponding VFP7 SP1 replacement files, which are dated 1/4/2002. If this is the case, these files will not be updated when you install VFP7 SP1. There is no message to tell you that a file has been skipped. The solution is simply to delete the original vfp7runtime.msm and vfpoledb.msm files (you might want to make a backup first) and then install VFP7 SP1 again.

Thanks to Jim Saunders of Microsoft for confirming this.