Steve_C is absolutely correct on these.
The booktype thing: On 4163B it is the same - no change for +RW - and that really sucks. Maybe LG will add it one day. We should flood them with emails for that. No chance otherwise. No one believes it will be hacked into the firmware by some clever guys, not even the clever guys themselves. Again, we should bomb LG with emails/requests/complains whatever. May work. Possibly.
The drive in it is an internal drive in an external case, exactly that, no more and no less. The external case itself has a kind of controller to make the internal IDE drive accessible as a USB Storage or Firewire Storage or whatever device. That controller may have a firmware of its own. Maybe the LG updater will update that firmware as well.
So if you wanted to you might update the whole external thing to a later firmware (ODD and controller, that would be I guess) and then rip the ODD out like Steve said, put it in a PC and put latest 4160 fw on it.
But as long as there is nothing substantial to gain from that, I would not do this. Maybe a later 5160 firmware update will then not recognize the drive and therefore not update the controllers firmware. Or maybe they did some small changes in the firmware to make the drive work better with the controller. I think no one really know.
If you know for sure of a way to get back to the original 5160 firmware, you may try. Otherwise you might convert your expensive external drive to a cheap internal drive (having the most recent firmware).
That is just my opinion. I dont own such a drive, otherwise I guess I would be interestend in being able to use internal firmware as well, but I would invest some work to find out where the differences really are...