I'm about to flash my Benq drive for the first time here pretty soon and I was just wondering if I needed to update my console to the latest dashboard before I flash my drive?

Yes you should wait, you should also wait until C4eva release the new firmware before you update, if you flash it then update you will get E66. If you update then flash it then you may get banned and wont be able to play the new xgd3 game format until you update to the new firmware.