Never really looked into it. I always figured it was flashing a rom more than a software update. But that can't be right either b/c when you do the nasty Master Reset you have to update the towers again. That is a very good question! Where does the PRL update go? Maybe someone will find this and answer that. Or start another post and ask. This will of course drive me crazy until I find out. Google, here I come! If you find out before me let me know, ok?
I found this if you are on either one of these networks.
http://www.evdoinfo.com/content/view/56/63/