In order to install the update pack correctly, you must apply patch 01 to Icaros Desktop 1.3, because it makes some important fixes to LiveUpdater itself.
So, the correct procedure to upgrade Icaros from version 1.3 to version 1.3.1 is:
1) download the patch01 and apply it
if your AROS machine is directly connected to the Internet and you can surf the web
2) start LiveUpdater from SYS:Tools/LUPD and choose the "Internet" option
3) wait for the procedure to finish
otherwise, if you can't access the Internet from AROS directly, you can:
2) download the update pack from Icaros 1.3 ro 1.3.1 and move it to your AROS machine
3) start LiveUpdater from SYS:Tools/LUPD and choose the "File" option, then locate your update pack file
In any case, you're not required to unpack the .7z archive, LiveUpdater will do all the work for you!
The other good news is that Kalamatee has successfully ported Ross Vumaca's PCI128 AHI driver, and it's already working very well on VMware. Next Icaros release will have audio on VMware, but maybe we'll add it with a patch, if the testing phase of the driver won't take too long to finish.