When I connect my iPhone 4(currently running iOS 6.0) I am unable to update it to iOS 7 because when I click update it wants to open/choose a file.. Any suggestions what is happening?

I'm just trying to update my iPhone to iOS 7 through iTunes and I can't work out how to do so.

I've seen everywhere else on the internet when you connect your iPhone to iTunes and click "Summary" it has "Check for Updates" and "Restore iPhone..." just below what iOS you are running. However, mine says "Update" and "Restore iPhone..." also it says this above these buttons "A newer version of the iPhone software is available(7.1). To update your iPhone to the latest software, click Update.".

Upon clicking on the "Update" button it opens a window with a title of "Open" and shows all of my Desktop folders and Application folders and such. What am I supposed to be opening(if anything)? Same thing happens if I click the "Restore iPhone..." button. Help ASAP would be much appeciated.

I am also running iTunes 11.1.5. I have never updated my iPhone with this computer if that helps.