Follow the links and instructions left by Hawkeye22. By default your Download directory is C:\Users\<Your ID>\Downloads (for Windows Vista/7) or C:\Documents and Settings\<Your ID>\Downloads (for XP and prior).
And remember, as stated in the "PC Version" link, the folder structure on your USB drive has to match the instructions exactly... PS3 ---------> UPDATE ---------> downloaded update file...
If you can use the wired or wireless functionality of the PS3, that will be the most convenient. I've had to go the manual update route once or twice and it is easily doable, although a much bigger hassle in comparison. Good luck!