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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Actually, I forgot there is the "Point of no return" Once the updater starts it actually sets a register in the flash that it's in the update process to that fw version.
Therefore no temp files are extracted until after the flash is formatted or whatever. Someone would have to make an app that takes the extracted PUP and makes calls to UPDATER.SELF to extract those files. :[
--Update: got my 60GB to boot. Put the original HDD back in, but I'm sure it won't accept another HDD until I update or something.