Yeah, I'd like to emulate the RUU utility to eliminate some of this confusion. You are correct, ignore the Reset in "Step 1" of the RUU, and ignore the "soft reset" at end of RUU. The correct build sequence is
1) .....push play button,
2) lot's of stuff scrolls up buildstatus window,
3) bootloader mode instruction pop-up appears - set phone to bootloader mode,
4) connect phone by USB cable (if it's not already connected),
5) RUU starts, ignore Step 1 reset instruction,
6) push Next buttons until flashing is done,
7) ignore soft reset instruction at end of RUU,

unplug PPC, hard reset instruction pop-up appears - hard reset,
9) [unplug ppc here if you didn't already],
10) visualize the glory of your new ROM.
You can reconnect your USB cable after your PPC fully boots, if you want.