SQL Server Slipstream installation and Product Updates

SQL Server 2008 PCU1 introduces slipstream installation. This method allows STM, SP, and CU to be installed at one time. But it needs a setup. See

Creating a merged (slipstreamed) drop containing SQL Server 2008 RTM + Service Pack 1 for details.
Starting from SQL Server 2012, SQL Server uses Product Update in SQL Server 2012 Setup. This method integrates the latest product updates with the main product installation so that the main product and its applicable updates are installed at the same time. Product Update can search Microsoft Update, Windows Server Update Services (WSUS), a local folder, or a network share for applicable updates. After Setup finds the latest versions of the applicable updates, it downloads and integrates them with the current SQL Server setup process. Product Update can pull in a cumulative update, service pack, or service pack plus cumulative update. Product Update functionality is an extension of the Slipstream Functionality in SQL Server 2008. It tries to make the setup process more automatic. See Product Updates in SQL Server 2012 Installation for details.

In short, the Product Update feature replaces the Slipstream functionality that was available in SQL Server 2008 PCU1. Therefore, the command-line parameters, /PCUSource and /CUSource, associated with Slipstream functionality should no longer be used. The parameters will continue to work, but may be removed in a future release of SQL Server Setup. The /UpdateSource parameter combines the functionality of the Slipstream parameters. If you still want to use slipstream installation for SQL Server 2012 and 2014, see this article for more details.