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I managed to download one file, it's just a folder called "PSgroove" or something. I put it on my USB stick and plugged the USB into my PS3 but nothing happened. My PS3 is on the latest update. Do I need to downgrade JUST to see that I have the right files on my USB?

dude first of all you cant just put it on any usb stick you need to put it on a development board, such as a teensy++,teensy,at90usbkey,or some other devices .(just google psgroove devices)

and the latest firmware isnt downgradeable so you cant do the jailbreak at all.

my suggestion is buy a new ps3 with FW 3.41 the jb only works there.