You can use tar xfz on the empeg itself -- no need to gunzip the file first.

I keep the base.tar.gz and configs.tar.gz in /drive0, so that they're not overwritten by applying a .upgrade file. Then I just:

# cd /
# tar xvfz drive0/base.tar.gz
# tar xvfz drive0/configs.tar.gz
# exit
(restart the player)
Ctrl+C
(the scripts run for the first time and sort themselves out)
# exit
Ctrl+C
(to remount the disks read-only)
# exit
(to restart the player)