To quote from his site (linked above), roughly translated:
"This program allows to simulate the dev_flash from USB. Allowing a Custom Firmware. We may modify the files of our new dev_flash (USB) as we please, without running the risk of throwing away the PS3.
It is a beta version, probably find bugs. I will continue working on it when time permits me. Remember that suffers no risk to the console. All that is changed the new dev_flash'll be doing really USB.
• Syscall PEEK and POKE.
1. Copy the "FTP server" the entire contents of the / dev_flash the USB (the root).
2. Copy the JaiC_USB_FIRM_LOADER.pkg also the root of the USB.
3. Install the package.
1. Insert the USB into the PS3.
2. Run USB LOADER FIRM. After a few seconds will return to the XMB. The new firmare is loaded.
You will see that whatever you do the USB will be launched. Ideal for amending RCO, exchange modules, as you imagine.
Do not update while in Live Firmware Mode. It will reboot, setting the original dev_flash back, and then it will update! Do not update from USB FIRMWARE LOADER!"
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I'm not sure. I haven't tested it on a jailbroken PS3. I only know it resumes after unplugging the HDD because I use a cable to connect an eSATA drive to my 60GB PS3's internal SATA connector. Sometimes I accidentally bump it and knock it loose.
If you take out the PS3's HDD while it's running it freezes, but when you reconnect it then it starts going again. That's on my 60GB anyway. I'm not sure how much time you have or about PS3s with the smaller flash memory.