The key component to the Profile 2.0 specification is compatibility with BD-Live. This gives you access to all manner of online and interactive content such as previews, special features, games and more.
In order to update the BDP-S350 you'll need to connect the player to the Internet, where you should be prompted to download the new Firmware.
As a certain amount of 'persistent memory' is required for the update, you'll also need to plug in a USB memory stick with at least 1GB of storage.
With the Sony BDP-S350 now being available for as little as £170 if you look hard enough, there's now no need to let the previous lack of Profile 2.0 specification put you off. The lack of decent BD-Live content – for now – is another matter...