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[C o s m o]

If using a disc, it either needs to be a DVD-R or a CD-RW.  CD-Rs and DVD-RWs don't always read well in the Xbox.
If I were you, I'd just FTP into the Box (while in the Xenium OS) and FTP the BIOS you want to flash onto the hard drive.  Remeber where you put it.
Now, when you go into the flash menu, and it asks where you want to flash from, select the partition and folder where you put your BIOS and flash from there.

[acemilo]

Also, the xenium os will NOT read xiso formatted discs due to legal reasons, it will only read iso 9660 formatted discs.