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PS3 Update 3.42 Fixed the exploit which allows you to run the backup manger and PSJailbreak and if you update you will not be able to run the backup manger and you wont be able to play backup games.
If you didn't update you would not be able to play online but i will show you how to bypass the firmware update and allow you to play online with your backups.
All you need to do is on your PS3 go to Settings>Network Settings>internet connection settings>custom>then wired or wireless which ever one you use>manual settings.
when it gets to the Ip address settings press X on manual and enter your Ip Adress and change your DNS settings to
67.202.81.137 for both primary and secondary. If you don't know your ip address and routers ip before you change the settings copy the ip address and routers ip from the settings and connection list under network settings.
(Directly taken from HF member named: "Comeplay666. Do not give me the credit, give it to him)