This means that the filesize will grow with each version.
This guide explains how to manually download PS3 System Software (firmware) Updates on your PC, copy to a USB flash drive, and then copy and install on your PS3.
It is also possible to just connect your PS3 to the Internet and let it handle the updating for you.
You will need a USB flash drive (thumb drive, removable media, storage media, etc) with enough free space to store the system software update file. It might be worth noting that updates are not incremental.
Each time you download an update file you are getting all the previous updates in the file too.
You must renew the Advanced Access Content System (AACS) encryption code on your Sony Play Station 3 every 12 to 18 months.
The encryption code is required to play commercial Blu-Ray movies and access some features on Blu-Ray discs.
The PS3 will automatically update the code when you apply a system update.
You can update the PS3 system software using a USB flash drive, a new game disc or over the PS3's Internet connection.
I've added a video below for those newer 'slim' models.
This is something I have done three times now and I thought I'd share my experiences.
There are lots of other guides to doing this online and they are pretty good - it's how I managed to do it the first time - but they often omit a couple of bits of information which might pose problems if you don't quite know how to handle them..