Am I using the right update button in the about phone screen under settings right?
Yeah:
1: Settings
2: About Phone
3: System Updates
4: (InnoPath ActiveCare should pop up with three options: Status, Check New, About).
5: Click "Check New"
And thats it. It will check for the latest updates to for OTA firmware upgrades, and in the future, OS upgrades (ie., Froyo 2.2).