Here is a guide on how to handle Xbox 360 updates today:
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If your console isn't connected to the internet, you can use a computer to download the update from the Official Xbox Support Page : your USB drive to FAT32 . Download the system update .zip file.
The Xbox 360 cannot read modern file systems like NTFS or exFAT for system updates. Plug a USB drive into your PC. Right-click the drive and select . Choose FAT32 as the file system. Click Start to clear the drive.
Follow these steps to manually update an official, unmodified Xbox 360 retail console. Step 1: Download the Update Files
Many newer games include the necessary system update on the disc itself. Insert the game disc.
Unzip the contents. You should see a folder named $SystemUpdate .