iPhone 2.0 is Live: Start your Updates NOW!
Note: since this is a separate file, make sure you're backed up to iTunes before you start, this full update will erase all your data and you'll need to have your data backed up in order to restore afterwards.
In order to install the firmware, you will have to do it manually by pressing the Option key when pressing the "Check for Update" button in iTunes. Then select the .ipsw file manually. If for some reason your download is a ".zip" file, rename it to ".ipsw" before proceeding.