You can burn the upgrade onto CD or DVD ... a DVD-R should be fine but SOME MK4 Navicomps have issues reading anything but original DVD's. I had one like that in my E46.

Personally, I use just bog standard good quality CDR's for firmware upgrades as it seems a bit of a waste using a DVD-R for such a small amount of data.

Remember that when you have upgraded, you won't get the 3D Perspective option available until you go into the engineering menu and enable it ... you will then get the PERSPECTIVE option additional to the North Up and Track Up views.

HTH.