It looks to me like your system just has too many choices and confusion is creeping in somewhere.
You might try temporarily uninstalling any Roxio software you're using, also Plextools.
Alternatively, if you have access to another PC, try moving the device to it, update the firmware and swap it back again.
Or, possibly, just start Windows XP in safe mode and see if the update works then.
It might also work from the command prompt (Win-key/r and type in cmd/enter)
Personally, I've always had a preference for updating firmware (another name for BIOS) from DOS, but many mfrs are now making this difficult or impossible.