To manually update the firmware, put the new firmware named as update.zip onto the root directory of the microSD card. Then do this: (found at androidspin.com)

  1. power off the phone
  2. hold down the trackball and press the Power button.
  3. you'll get a white screen with three Android robots on skateboards → select Bootloader
  4. now select Recovery
  5. the phone will reboot showing a robot and a warning sign
  6. now press Power and Volume up together (if it doesn't work the first time, try again)
  7. now choose Apply sdcard:update.zip (use trackball!)
  8. wait for it to finish
  9. choose Reboot now