On the root of the USB drive, create a folder named PS3 . Inside that, create another folder named UPDATE (all caps).

Unlike many "stability" updates, version 4.89 brought noticeable changes to how the console interacts with Sony’s servers:

Save the update file as PS3UPDAT.PUP inside the UPDATE folder. Installation: Plug the USB into your PS3. Go to Settings > System Update > Update via Storage Media . Follow the on-screen prompts to complete the process. Important Considerations for Modded Consoles