The Blu-Ray update should have identical results if installed properly. If you update via CD, remove the CD when the drive kicks it out (and it will during the update). If you're updating via thumbdrive, do it with an empty tray so that when the unit restarts, it boots into the menu.
Outside of that, if it still doesn't play Blu-Ray discs, then I would recommend having the unit serviced.
I purchased the BDP-1600 in December. I've played one DVD that was a Blockbuster rental version (no menu, no full BD features) with no problems. Also plays DVD's just fine. I tried to play two BD's from Netflix (Transformers-Revenge of the Fallen and Angels & Demons); both fully featured BD's, and neither will play. The 1600 attempts to load them, but freezes during the load/play process, and the BD's are ejected with the "Can't play disc" error. I've downloaded the Version 2.05 firmware update and installed via USB flash drive on the player, but I still have the same playback issues. I called Samsung Customer Support, and the rep only wanted to send me a firmware DVD to install. I asked her if this was the same firmware that I just dowloaded and installed from the Samsung support website, and she couldn't answer that question. I emailed Samsung tech support, and they advised to do the the manual player reset (hold down FF buttton for 5 seconds, pick language when it re-boots, etc.) This did not fix the problem either. They also confirmed it was the same firmware version (2.05) on the DVD I'm supposed to receive in 3-10 business days that I've already installed via USB, so I see no reason to think this DVD will fix my problem at this point. Do I have any other options?