You get an automatic question when the firmware in the USB-FET does not match (the firmware copy inside the) msp430.dll, see Background information from Texas Instruments.
The question should always be accepted.
The msp430.dll handles the firmware upgrade / downgrade, so the firmware is replaced by the firmware in the msp430.dll.
Latest version of the DLLs (the msp430.dll and the hil.dll) can be downloaded from Texas Instruments, and copied into the \430\bin directory. In most cases there will be no issues of incompatibility in the C-SPY debugger doing so.
Since IAR Embedded Workbench for MSP430 version 5.51.x, it is no longer possible to use the v2 version DLL or firmware (since the firmware API has changed). To downgrade the FET firmware to v2 anyway, use:
<installation directory>\430\bin\UpdateTool -u DOWN
After upgrading to IAR Embedded Workbench for MSP430 version 5.40, there might be problems using the FET debugger with older IAR Embedded Workbench for MSP430 releases. It is possible to replace the old msp430.dll with the new DLL from IAR Embedded Workbench for MSP430 5.40, to get it working. If this does not work, you can use the downgrade utility, V32V2.bat, located in the 430/bin directory to do a firmware downgrade. See the 5.40 Release Notes for more info.
If there is a need to debug in IAR Embedded Workbench for MSP430 4.21 (or older) after working with IAR Embedded Workbench for MSP430 5.10 (or later) this will probably force a replacement of the drivers. Different aspects of this (including the procedure) are covered by Technical Notes 45523, 52827 and 98008.
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