Instructions
Flash Drive
Plug your flash drive into your PC.
Go to Microsoft's Xbox 360 website and download the latest version of the console's firmware to your machine. Right-click on the firmware .ZIP file and click "Extract" to extract the contents of the archive to a folder.
Click "Start" and "Computer."
Drag the firmware update files over top of the icon for the flash drive in "Computer."
Unplug the flash drive from your computer. Plug the flash drive into the Xbox 360. Turn on the console to update the firmware.
From a CD
Go to Microsoft's Xbox 360 website and download the latest version of the console's firmware to your machine. Right-click on the firmware .ZIP file and click "Extract" to extract the contents of the archive to a folder.
Put a blank CD into your computer. Click "Burn Files to Data Disc" in the Microsoft autoplay window.
Drag your Xbox 360 firmware update files into the window on screen. Click "Burn to Disc" to copy the files to the CD.
Remove the disc from your computer and insert it into your Xbox 360. Restart your Xbox 360 to update the console's firmware to the latest version.