Thank you for your reply, another annoying little question: Can I update my system to the latest firmware without any worry? The shop owner said not to, saying something like "the old games won't work," but that's not the case right?
Is your PS3 hacked?
If so then your firmware would be 3.55.
If that is the case that your PS3 is hacked then you
cannot update your PS3's firmware as it will lose its piracy capabilities...
You won't be able to play any downloaded/hacked/pirated game anymore then...
If it is not hacked and you are using original discs to play games and going online too, then yes you can update your PS3's firmware without any worry.
However you have two options:
1. Update the firmware directly from PS3.
2. Update the firmware from USB (after downloading the firmware to the PC)*
* Note that you should only download that region's firmware to which your PS3 belongs to...
e.g. If your PS3 is of Region 1, then download the firmware from USA website of PlayStation and so on...