First check the build number (Settings \ About Phone) and check the build number out which needs to be ETE27.
- Download the 44.4mb update file from Google
- Rename the file to update.zip
- Copy to the root of the SD card as shown
- Turn the Nexus One off
- Hold down the trackball button and turn on the Nexus One
- Scroll down using the “volume down” button to the recovery option and press the “power” button to select.
- The phone will reboot and allow you to select the firmware to upgrade.
- Scroll down using the trackball and press it to select.
- The firmware upgrade will begin immediately, allow 5 minutes for the flashing stage.
- After the firmware is flashed the Nexus One will reboot.
- Startup shows the upgrade was successful.