Before we get stuck in just a note about the functionality. If you are looking for a device that can integrate with your desktop Lync client then this is NOT the device!
This phone is for those “dial tone only” locations like in the lunch room.

When thePolycom IP331 arrives it usually has an older version of software on the device. Mine came with SIP Software version 3.3.3.x and Boot ROM Version 4.3.1.x

OK, so the phone needs the UC SIP Software Version 4.0.x to play nice with Lync. Shouldn’t be too much trouble, yeah right!

After spending hours chasing my tail on the net I finally managed to upgrade the phone. So here’s the quick facts.
Before the Upgrade the phone URL access was user Polycom, Password 456 and disploayed the image below once logged in.

So we begin, first you will need to have an FTP server up and running. I used Filezilla Server.
Once installed you will see the Connect to Server window, just click OK

Next we need to define the user and home directory. Click on Add user and define the user name

and the password

Next, define the FTP root directory.

Make sure you allow Write and Delete, and set as home

The FTP server is now configured, next you will need to download the Upgrade files for both the BootROM and the SIP Software. Its a bit overwhelmed when you get to Polycom’s website since there are so many different phones and software versions.You will need to go to the site to download the correct files.

I will document the IP331 files.You are presented with a Combination and a split download. Regardless of the BootROM version (and contrary to what the site states) download the combination.

When you click on the link you are presented with the page below

You will need to download the Polycom Upgrader 4.0.0. Utility (as I did and I was on BootROM 4.XX!!) if your BootROM is pre 4.0 (DO IT ANYWAY)
Once you have downloaded this you can go ahead and check the radio button and click on Submit – which will start the SIP Software download. Once complete copy both the Upgrader files and the Software files to the FTP Root directory so it looks similar to the below.
An FYI, The files match the phones part number.
So how do you get the phone to boot from the FTP server?
From the Phone MENU Settings > Advanced
               AdminSettings > Network Configuration Scroll Down to ServerMenu check
              Scroll down to ServerAddr check (use # to change from URL to IP)
              Now enter the IP Address of your FTP Server (use the * key as a . )
              Scroll down to ServerUser and enter the FTP user account
                    (using the # key to switch case and number)
             Scroll down to ServerPwd and Enter the FTP password
             Scroll back to see the SaveConfig prompt and save.
Reboot the Phone. It should connect to the FTP and start downloading the BootROM.

Had to change off DHCP so as not to get settings for internal IP PABX. After download and reboot remember to switch back to DHCP so Lync FE can be resolved.

Once the upgrade is complete you can check the phones URL with http://, password is 456 and should see something similar to below.
And voila! You have successfully upgraded the phone.
Getting the phone to register with Lync has been well documented by Jeff Schertz here.