It's better to make two CDs, one with your current version - 1006 - on the same page in order to have a backup in case anything goes wrong and one with the 1016.
Then update the drivers as they say. You can find the chipset drivers under "Others" on the same page, get the V6.65 for XP.
The next CD Also was JUST a boot disc. As long as I can figure this bit out, I might be going somewhere. Be much more cost-effective if my USB key worked though.
Thanks for your patience BTW Mosox, it's appreciated.
OK, I see now that Asus has quite a few utilities for updating the BIOS but under the "BIOS utilities" on your mobo page there's no windows 7 utility (some work from windows) so it's better to contact them and ask. I found this one: