The Software update is a "ISO" file. This is an image file that needs to be burned to either a CD or a DVD using any CD/DVD burning software that allows for ISO files.
I used "My DVD" software application to burn the files to a CD. That's right, a CD. Load the CD into the Z1 and hit the menu key, The Z1 will boot it up from there, follow the Z1's on-screen instructions. The Z1 will automatically shut down and restart by itself, then reset the unit one more time.