Note: If you are updating a hard drive edition of Band-in-a-Box, be sure to select the correct destination directory - either X:\bb (where X is your USB drive letter)

So what it means is when you are applying the update that you should check your USB hard Drive letter that the Band-in-a-Box USB hard drive falls under (X:) and replace it with yours.

So for example I look at mine and it is E:\ so my updater would look like this.

Path for Band-in-a-Box = E:\bb
Path for RealDrums = E:\bb
Path For RealTracks = E:\bb

Next -> Install -> Finish.