**update**
I finally got mine softmodded, it was relatively painless. (thanks Blux for sending me the softmod kit! Worked like a charm, will send it right back).
ok, now I am having difficulty updating to the newest XBMC. I have ftp'd the new file and the old XBMC continues to load

Can someone please provide any tips or help? Just about done modding this oldie and just need to update newest version to start getting some good use out of it.
What I have done/not done:
*Used Hexen disc to install old XBMC to launch from e: as Dashboard.
*XBMC booted perfectly,as Dash, then went to File Manager. (read somewheres that it is not good to ftp and update XBMC while running it, so launched another dash.)
*Went to E:Drive
*selected evoxdash.xbe to boot Unleash, then just left the dash there idling. (Not sure if I need to go to Hexen tools and launch the Dash from there instead, so please chime in if I need to).
*Downloaded and used Filezilla to ftp to the XBOX. Used 198.168.0.2 as address, user:xbox, password:xbox-then hit connect. (note: I ftp'd with static ip not dhcp. Using a router so not sure if this is okay).
*connected successfully and went into E: folder.
*then went to Apps folder.
*I then dragged the new file XBMC 3.2.1 and put it right next to the original XBMC file.
-This is where things get strange on me..-
*Renamed old XBMC folder to XBMC2 and renamed new XBMC build to just XBMC. As I rename the last file, both files then just revert back to original file names, not sure whats happening?

?
*I reboot Xbox and same old XBMC comes back on. Should I just put the new file straight to Dashboard folder, or not good idea?
Anyhow, apologies for the poor explanation/confusion, probably making this harder on myself than need be. If anyone has any suggestions, please give insight on how I can go about updating XBMC correctly.
Mike