I'd like to share with you an issue and its solution.
So if you want to upgrade firmware on SMB appliances like 1100, 1200R etc.,which have embedded Gaia OS, you will probably face with a lot of problems.
There is a small guide (sk107592) or you can find official Check Point 1200R Appliance Administration Guide:
To perform a fresh/clean install of firmware on 600/700/1100/1400/1200R appliances via USB, the USB must use a FAT32 file system.
- Copy the desired firmware image onto the USB (not in subfolders and not with other firmware images present).
- Insert the USB into "USB1" on the front of the appliance.
- Wait for the "USB1" LED light to activate, indicating that the USB was detected.
- Reboot the appliance either via the WebUI, SSH command #reboot, or by power cycling the appliance.
During the boot process, the appliance will detect the USB and firmware image.
The appliance will perform a reset to factory defaults, followed by a fresh install of the selected firmware version.
Note: You may need to use Ctrl-C to interrupt the bootloader and select the relevant option.
Note: This procedure erases the existing image and settings.
First of all you can not do manual upgrade via Web interface, because of operation failed error.
Moreover USB is only one way to upgrade your device.
What is the desired firmware image? It is an appliance package, not the actual firmware!!!
Here is an example of what you have to download (img extension).
Then you copy this file on the USB (may be you'll need to extract and archive) and follow the instruction.
P.S.: If the USB is not read, try to rename your image file to fw1_ind_vR77_990172541_20_81.img view (this is what appliance wants to see).