How can i update the ios .bin image on a 871 router

Will this require that the routers on verizons side need to also use loopback interfaces?

Would using loopbacks hinder performance at all. 

Ok.  Now if the primary tunnel is working now , then wouldnt that mean that the internet router does see the 2 address block.  And if I try the config that you mentioned how would it look compared to the following current config?  crypto keyring vzwv...

I am connecting to Verizon wireless through the internet via the tunnels.  You are correct in your understanding of the updated drawing.   Those 2 additional subnets of public addresses were assigned to us by the ISP 216.255.122.56/29 and 65.51.250.1...