I have unziped the update file and stuck it in the root directory of the usb drive, FAT32 formatted, with the name "$systemupdate". When I stick it in the usb slot on the xbox 360 nothing happens. I don't get an auto prompt to update. If I go to the memory section of the system settings, it does see and recognize the usb drive. I've tried turning the console on and off, clearing the cache and nothing has worked. Even tried multiple usb sticks. Quite maddening.