When you get a firmware update and download it. It is not installed -- it will just keep appearing in the list for download each time Software Update runs.
To actually install a firmware update, you must run the XServe Firmware Update utility in the Applications --> Utilities folder.
After you run the utility, it will give you an instructions page. A couple notes:
1. If you do what it says and manually shutdown each service in Admin Server than these will not automatically start back up after the system restarts after the firmware installation !
2. After you shut down, you hold the power button until the processor activity lights both light up. Afterwards the monitor will blink off and on as the firmware gets installed in what appears is at least two special reboots. You watch an almost empty with nothing but an install status bar.
3. When the system really reboots again. Log in with the admin id. Wait until you get the message that the firmware was updated successfully. Then if you obeyed the note to shut down the services manually, you need to go to Server Admin and manually restart them.
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