Follow these steps at the HMC interface to upgrade your HMC by means of the Recovery DVDs. 
Select Licensed Internal Code Maintenance. 
Select HMC Code Update. 
Select Save Upgrade Data, and then insert a formatted DVD-RAM media into the DVD drive. 
Select DVD Drive, and then click Continue. (In some HMC versions, you must log in to the HMC as a user with the hmcpe role, otherwise the DVD option is not selectable.) 
Note: Selecting "DVD Drive" saves the upgrade data to both the hard disk and the DVD-RAM. Therefore, you have a DVD backup of the upgrade data stored on the hard drive. 
Wait for the Save Upgrade Data task to complete. If the task fails, contact your next level of support before proceeding. 
If the Save Upgrade Data task is successful, remove the DVD-RAM, insert the first V6.1.0 recovery media into the DVD-RAM drive, select the Console menu option, and then select Exit. 
Click Exit to display the Exit Hardware Management Console window. 
Click Reboot Console.

The HMC reads the media in the DVD-RAM drive and displays the Install/Backup/Restore wizard window. 
Select Upgrade, and then click Next. 
Select Upgrade from media, and then click Next. 
Click Finish to start the Upgrade process. 
When prompted to insert the next media, remove the first media, and then insert the second media into the DVD-RAM drive. 
Select Option 1, and then press Enter to continue the upgrade. When the second media is complete, the following options are displayed:

Install additional software from media. 
Finish the installation 
Select Option 2, Finish the installation, to complete the Upgrade.

The HMC restores the data preserved by the Save Upgrade Data task.

The HMC then completes the booting process, during which you are prompted to select the language and keyboard mapping. 
At the Hardware Management Console login prompt, log in using your user id and password. 
Accept the License Agreement for Machine Code twice to complete the HMC code update. 
 After the HMC is rebooted, follow these steps to verify that the HMC upgrade was successful: 
Click on "Welcome", then click "HMC Version" next to Welcome at the top
The Version is 7
The Release is 3.4.0
The Service Pack is 0.
HMC Build level 20081014.1
","base_version=V7R3.4.0 

Please refer to http://www14.software.ibm.com/webapp/set2/sas/f/hmc for the
latest upgrade/install information.