ckolivas is the primary developer of cgminer and has update to date images of the avalon firmware for download...
http://ck.kolivas.org/apps/cgminer/avalon/

You download one of the .bin's there to you PC. Go into the system /firmware area of the avalon web interface... Give the location of the image you downloaded, and tell it flash... then sit back for a few minutes while it works until the page reloads on it's own.  It will take a few minutes during which it doesn't look like it's doing anything. When the web interface comes back it will have rebooted with the new firmware.

The options go in the extra flags area of the cgminer config page. They give you a good start at letting the avalon auto tune itself to the fastest stable speed.