From iBasso Change log, improvements with this firmware:
1. Added folder play function.
2. Added the Button Settings function to reverse Next/Prev
3. Shows the percentage of process when media scanning.
4. Improved support for CUE, the first half second of CUE (sound) now is played, and CUE can now be played without a full media scan.
As it was mentioned in Paul's post, there is a readme.txt file (change log) when you unzip the .img file. Readme file will have a change log and instructions how to update the firmware. It's important to put .img file on micro SD card #2, the one which is closer to the back. No need to create any sub-folders, just copy "update.img" file into the root of micro SD card#2, go to Settings -> Advanced -> System Update and click "Yes" to proceed.
After the update, I noticed the volume wheel graphics was part of the wallpaper and I had an issue scanning both cards together, only worked with one at a time, including song browsing only by directory. But everything gets fixed once you do Factory Reset.
So, right after you update the firmware, run Factory Reset, and everything is back to normal. Both cards scanned fast, My Music song browsing works fine, etc.