You won't have to update your firmware but you may need to reinstall your current firmware. Also the PS3 won't detect the full 2TB of space on that HDD it will only detect up to 1TB of space so you would have 1TB of wasted space
You will use the extender as any other ext. device. You will need to connect sata connectors then the ps3 will run it as o open drive so formatting is a waste of time, ps3 will format when you boot up with new drive.
You will need to flash 3.41 update when prompted to, just use the same file you used to update before. insert flash "select & start" simultaneously, and you're in business. FW is stored but you must flash it when it ask upon initial boot with new drive.
The power drawn from the 2Tb will be a issue not to mention ps3's lack of recognizing the other 1TB (as mentioned by another poster). There are NO 1Tb 2.5 int sata drives. So Sony never anticipated that we would be adding such large amounts of HD space. Watch your power supply!!
You're ps3 may start trying to work too hard and power failure is next. A el cheapo volt meter from wal-mart may just save your system and hard work. Just hold the device over the power cable. If its fluctuating a lot then that is your first red flag of failure... after all the 250gb int. takes 12v to operate.
I've done this set up so I hope it helps, GOOD LUCK.
this drive is too tall to fit into the PS3 fat or slim, you would still need an external patch cable (*TPVT models are 12.5 mm high and may not be compatible with all notebook systems. Consult system specifications for maximum allowable drive height before attempting to install.)
and yes 1TB is the highest capacity for an internal, 750GB is the highest capacity that will physically fit internally (except for SSD's of course)