You have to extract the image file and copy the BM folder to the root of your USB stick. You can upgrade the FW with the FW Manager and BM with the App Browser like any other app.
The USB stick has to be formatted in FAT(16) or FAT32.
An other way to upgrade is to use the network, that way you can even upgrade older software (since R19, IIRC) without wasting CDs. Make a bootCD with PS2Link (with a propper IPCONFIG.DAT of course) and rename the PS2Link.elf to PS2.ELF. That way you can boot PS2Link even in recovery mode and you're always able to upgrade via network, no matter how screwed your system is.
best regards Jones23