Here is the page where I found out how to make it work. If you have a writable CD a thumb drive, use the thumb drive, because it's much easier.
Also, make sure it’s formatted as FAT32 and not NTFS.
The Microsoft Corporation updates Xbox 360 software when new features or problem solutions for the console are available.
Step 5 – Restart the console if it does not do so automatically after the software update is complete in order to finish updating the Xbox 360. New game discs are designed to check the system for Xbox software that is out of date compared to when the disc was created and to prompt for installation of newer software.
Step 4 – Restart the Xbox 360 game console and the software update will be completed.
Step 4 – Choose the “Yes” menu option when prompted to update the console software.
i have triad three times to burn an update CD and all three times failed i have triad putting the zip file on the CD that did not work then i triad putting the unzipped folder on the CD that did not work and finely i tried to put the file itself on the CD and it still don't work can someone who successfully updated their system this way please help me but all help would be apricated I'm going to guess that this will never work unless you're running a hacked DVD-ROM firmware.If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. In order to get these firmware updates for your Xbox, you normally would download them from Xbox Live.Some of the common problems that game players experience that indicate the need to check for available updates include the dashboard themes not working or appearing on the console display, missing avatars, or the kinetic sensor not working.Since everyone does not use the x Box 360 in the same manner, Microsoft created four methods to update the software on the console: using x Box Live, installing from a game disc, copying to a USB flash drive, or burning to a CD or DVD. Step 2 – Select “My Xbox” on the game console and then choose the “System Settings” menu option.Bobi did not think it mattered i was not trying to be a jerk or nothing i just thought when you put something on a CD no matter how you did it you burned it on there so my bad and yes i did use a drag and drop I make a folder on my desktop. Then I use CDBURNERXP to create a CLOSED SESSION CDR. About 1/2 will fail to create the CD.-Here's what I did and the update worked, sort of.