What is the recommended way to upgrade firmware and drivers for HP Smart Array E200i controller on HP Proliant BL460c G1?
Is it better to boot from a Maintenance CD or install directly from the OS?
It depends on what's available to you and how much of a time window you have. If you can afford the downtime, the HP Firmware Maintenance DVD works very well and can take care of your BIOS, disks, NICs, ILO, etc. You'll probably want to run it via the ILO.
Otherwise, a clean way of running the firmware update is to run the Windows Server 2003 package, which allows you to update the controller firmware from the OS.