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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If you want to hack the update process, all that has to be done is a LV2 dump during the firmware update section... THAT's the hard part though...
THEN, we create a custom PSGroove that replaces what we need. If the PS3 is turned off during an update (NOT THE ACTUAL UPDATING THOUGH!), it stays in the update mode... at least that is how it was back in the FW1.32 days.
because before the ps3 updates it restarts in some way disabling the hack. so when you try and update it would install to the regular firmware instead of the usb. What we need is a way to have a perm hack so that even when the ps3 restarts the usb firmware still lives.