Instructions
Connect a USB flash drive into a USB port on your computer. It does not need to be an empty flash drive, although it must have enough free space for the update. The update file size varies with each update. Windows AutoPlay should open when you insert the flash drive. Click "Browse Files."
Right-click in an empty area within the flash drive folder. Move your mouse down to "New" and click "Folder." Your cursor automatically appears within the "Name" text box. Type "PS3" and press "Enter." Double-click the "PS3" folder.
Create another folder. Enter "Update" as the name. Press "Enter."
Navigate to the PlayStation 3 Update page (see Resources). Click the red "Download Now" button and then click the gray "Download Now" button. If your browser gives you the option of choosing the save location, save the file to the "Update" folder you just created. If you cannot choose the location, simply click and drag the downloaded ".PUP" file over to that folder.
Click "Safely remove hardware" on the Windows 7 taskbar to remove the USB flash drive from your computer. Insert the flash drive in your PS3 and turn on the console. Sign in to your PS3 profile.
Go to "Settings-->"System Update." Click "Update via Storage Media." A confirmation screen should appear and inform you it found the update. Press the "X" button on your controller. A progress bar appears. Do not turn off your console while the progress bar is on the screen. You'll get a notification indicating when the update has finished installing.