"Apply update " is used when manually installing an update or if rooted , another rom . If you put the update on your sd card , you could manually update your phone . That's how many got cupcake before it was officially out . The update.zip was floating around the web . All you had to do was download , rename , and apply . Next time there is an update , you could update your phone before you could officially . Rooted rom won't work this way on a regular unrooted g1 .
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