How do I manually Update the Anaconda stage 1 image?

Thanks to David Cantrell for writing this up.

WHAT IS THE STAGE 1 IMAGE?

The stage 1 image in anaconda confuses a lot of people. We've done a good job making stage 1 and stage 2 appear as a single entity, but they are really separate. The whole job of stage 1 is to load the necessary drivers to find anaconda (which we call the stage 2 image). Stage 2 could be located on a network...