OK, I'm no expert, but here is a problem some of you may be having and the solution.
The Problem
There's some people on the Net saying to rename the downloaded update file "update" without including the ".zip" extension.
Others say to rename the file "update.zip"
The correct name is "update.zip"
I suspect a problem arises for some of you because you have your Windows [file] Explorer "View" settings set to not display known file extensions (that includes the "zip" extension).
If you are hiding known extension types "update.zip" will appear as "update" without the "zip" extension.
Where the update has not installed properly for some people, the problem may be that he or she has 1) accidentally misnamed the update file as "update.zip.zip" or 2) misnamed it as "update" without any extension. More specifically:
1. Some people rename the Cupcake update to "update" WITHOUT the zip extension, exactly as people are telling them to do.
When they try to do the <alt> <s> command to perform the update the G1 reports back that it cannot find the "update.zip file" which is accurate since the file has been misnamed "update" and not "update.zip" The "zip" extension is missing. These people have Windows Explorer to show known file extensions.
2. The other error made is people who unknowingly have their Windows View settings set to "hide extensions for known file types"
Because these people cannot see the "zip" file extension, when they rename the update file to "update.zip" (again, as some experts tell them to do) they are misnaming the file "update.zip.zip.
They will then see the name as either being "update" or "update.zip" To the naked eye this appears correct, but it's incorrectly named and when the G1 looks for the file it won't find it because it has been misnamed.
So what to do?
The Solution:
First, change your Windows Explorer <View> settings to show all extension types:
To change the settings so that all and full extensions are shown:
Open <Explorer> (note that this is not your Internet browser, but your computer's "file" explorer),
Click <View>,
Scroll down to where is says <Hide extensions for known file types>
Uncheck the box.
After this change an entire file name, with extension, will show.
Correctly Renaming The Cupcake Update:
After changing your View settings you can make sure your downloaded Cupcake update is properly renamed to "update.zip" so that when you transfer it to your MicroSD card and enter the G1 Android update command, your G1 can find it.
So make sure the Cupcake update is properly named <update.zip>, transfer it to the G1's MicroSD card and go through the update procedures others have mentioned.
Hope this makes sense and helps. This was not an easy post to make clear without using a whole page and looking nuts.