Your second assumption is correct. The radio does not need to be turned on when you upgrade your internet radio - it's all done on the server side. The first time you use Internet Radio on your SL2 you will see on the bottom of the screen the words Premium Internet and will definitely notice the difference in sound quality! But obviously it does not need to be powered on or connected to WiFi when you make the upgrade.On a related note to this. To actually active the service on the SL2, should it be powered up in satellite mode, wifi mode, or is the feed determined by their streaming servers with no need to update the stiletto itself?
I've been meaning to do this for awhile now, but just haven't gotten around to it. The less monkeying around and calls to customer service to get it activated the better