Close PC Suite if you have it and then connect your N95 to the computer by usb cable in PC Suite mode. I also recommend connecting the charger too as a power loss when flashing will kill your phone.
Go through the wizard and, when it searches for updates, it should tell you the newest version available.
Just carry on through the wizard BUT make sure you don't crash your PC, lose power or disconnect the phone at any point in the process. It takes between 20 and 30 minutes depending on connection speed but I recommend you just leave the whole lot alone while it runs, go have a cuppa.
The phone will reboot during the process and once complete you will have a nice clean device with the latest firmware
If you have changed your product code to do this and want to change it back just go through the steps here and put the old one back on. Simple!
Before doing this, backup your contacts and any messages you want to keep using Nokia PC suite. There is some contention over the Nokia backup tool. Personally I have used it for every update and it's been fine but many report all sorts of problem once they restore the backup. If you do run a backup, untick the settings as they are a common cause of restore problems. You can just sync your contacts or copy them to memory card if you prefer not to use the backup tool.
If the firmware flash does fail, a Nokia service center should be able to sort it out for you, so don't panic.
It is not possible for firmware to 'partially' install so if you can't find something you are expecting, you are probably just not looking in the right place.
You cannot downgrade firmware. You can re-flash the same version as you currently have or 'side-grade' (I just made that word up) to the network specific version of the firmware once it becomes available.