Thanks to johoe for advice on the tar
Extract and copy update.zip to /sd of phone
Run Odin with Auto Reboot UN-checked, loading the i9000_Kernel.tar as PDA
Put the phone into download mode and flash the i9000 Kernel.
Pull the battery. reboot into recovery mode and flash the update.zip you put in the root folder of your sdcard.
Pull the battery again, reboot into download mode again.
Run Odin with Auto Reboot checked, loading the I9000XXJPC_KERNEL.tar as PDA