Yes that it: copy the .tar for the CM3 module (you did download …slice3 file?!) to the .update share / directory and reboot.
The reboot process detects the file in .update, checks it is not corrupted (downloaded OK) and that it is the correct file for the hardware it is about to install. At this point you will see messages on the screen if anything is wrong, it will then wait a while and reboot back to the previous (working!) version, no damage done!!! ***
If all is well with the file the update process then displays messages about unpacking the compressed files, tells you it is installing them and then reboots (after a short wait to let you read the messages :).
All should be fine and you should have the new version working fine.
*** I had a bad download for the CM3, it said the file was corrupted so I downloaded again and used that file, it updated fine.
Report back success, please