>I have installed SP1 on my development environment. However, I would like to make sure the production environment is having the EXE up to date. Do I need to install SP1 on the server as well or I simply recompile an EXE from my development environment, where it has SP1, and simply replace that one on the server?

You can and should install SP1 on the server if you've VFP installed there. Otherwise you should update VFP runtime files on the server to SP1.