Sounds like your nearly there then, if he created a update.bin file for you and you have updated your "xell" and have the official update from xbox.com then this will have sorted your avatars and stuff like that.
xell = to dump the cpu key and dvd key and view the fusesets to build a hacked freeboot image, A Xenon Linux loader, it allows you to glitch the machine and run images etc.
Dashlaunch, this runs before FSD when you power on the machine and you can change all matter of things in here, like what happens when you switch the machine on, you can make FSD load, there's loads of options in there that you can play with. it stops the machine from connecting to "live", taking updates etc. but will allow cover downloading if you have it set up correctly.
There's lots of things that you can do in the settings of "dashlaunch" and it's always a good idea to keep it updated.
You can set "paths" on booting, or holding down particular buttons etc. all depending on what you want your machine to do. There's also "behavior" "network" "timers" "plugins" for you to play with. just remember that when you change an option to save the "launch.ini" file on the HDD are your settings won't take place when the machine is started. (Launch.ini is a small text file that tells the xbox to do certain stuff)
FSD speaks for it's self, it's an awesome piece of programming as you know so hats of to the team don't know where we'd be without the guys that made it...
So back to your question, if you have updated your "xell" which by the sounds of it you have and your on 16537 dash then do you know how to FTP into the machine.? it's easy, run FSD or xex menu and then log into the ip address, use something like flashFXP (an FTP program for your PC) log into your machine and you'll see your hard drives etc.
Then simply download the new FSD and dashlaunch and unzip them if they are zipped and copy them over to the respectful folders and then run xex menu and locate the folders and run the default xex within dashlaunch so for example, copy over the new "dashlaunch" and then run it and follow the onscreen prompts.
There's also an "autoinstaller" I don't have a disk drive in my machine you see so I've always used FTP.
here for example is my jtag.