Depending on where you got it, you may need to rename the file to EBOOT.PBP; it's possibly named 2.0EBOOT.PBP at the moment.
The file should be placed on the memorystick such that it's location is:
Make sure the file is named EBOOT.PBP.
The update is started from the Game --> Memory Stick menu item.
If you have any issues, ensure you have over 51% battery capacity and that the unit is plugged into an outlet. You may also need to restore default settings (typical situation that occurs often is when no text is visible, etc).