Wirelessly posted (Mozilla/5.0 (iPod; U; CPU iPhone OS 3_1_2 like Mac OS X; en-us) AppleWebKit/528.18 (KHTML, like Gecko) Version/4.0 Mobile/7D11 Safari/528.16)
Try a different computer. I had the same exact problem and almost cried. I tried virtually everything I could think of on the first comp..... Plugged it into my second comp, worked perfectly. So plug it into a different comp, run the update program and follow the instructions verbatim.