How to update / restore your iPhone/iPod using the downloaded IPSW file:1.

Download the firmware for your device2.

OPTION-click (on Macs) or SHIFT-click (on PCs) on the Update / Restore button in iTunes3.

Connect your iPhone to your box.2.

When iTunes opens, select your iPhone under Devices in the Source List on the left.3.

In the iPhone Summary pane, click Check for Update.4.

Click Download and Install.

Do not disconnect your iPhone until the update has finished.