Hi
I will try to help if I can. OK lets start from the beginning.... First don't plug the USB from you PAW to you PC. This lead is for powering your PAW only and not for data or updates.
OK, Unplug your PAW from your PC and connect as you would when you go fly with your Ipad. Now open Safari and type in the 192.168.1.1 You should now have the PAW home page. Press the update page button on the top. Now as you have already been connected to your PC, you should have the new version next to the the install now button? If yes click Install and hold off doing anything for 5 mins. If the update is not showing follow the instructions for updating via a USB memory stick as it is a lot easier that way. If you are still having problems, Post on here so we can help you,