Before posting this I searched for 'LX3 firmware' and got 19 pages of results, none apparently about the LX3 firmware.
After selecting YES to update the firmware from v1.0 (confirmed) to v1.1, the process took about 2 seconds instead of 1-2 minutes. The camera then reverted to the standard "no valid image...." playback screen, without turning off as described in the instructions. I then formatted the card, and checked the current version number, which is now v1.1. So apparently the camera updated the firmware version number without doing anything else. The camera seems to work the same as before. Is this normal?