The process I used to update my G7 N54L Server (going from 5.1-5055 Update 5 to 5.2-5565 Update 1)
Power Down Server
Take out usb boot drive and update with latest boot image / re-insert usb drive
Power On
Select XPEnology DSM 5.2-5565 top boot option NOT debug or install/upgrade option
wait for it to boot
log in via web browser
Download DSM 5.2-5565.pat from http://www.xpenology.nl/xpenology-software/
update and let it reboot
log back in via web browser
go to control panel - update and restore, check for updates, let it download and install update 1
wait for it to reboot
Done