When you want to do such a thing as upgrading the BIOS of your Thinkpad, read the instructions that come with the bootable CD flash utility.
If you think you did, read it again – and do not interpret them.
It would avoid loosing time with a boot error like :
CDR101: not ready reading drive C
That occurs when you choose the CD player as a temporary boot device (Thinkvantage button and then F3), although it is required to really change the boot order within the BIOS menu (F2) and save this setting.
By the way, I really recommend a BIOS update if you are a happy Thinkpad T61 user : not only it fixes numerous issues with the Intel chipset, but it optimizes power management. I noticed that the fan management has been improved. It is most of time slower than before, so the laptop is more silent.