Fails every time and can't d/l the 3.2.2 update as a result. Why is this happening? Going to return this thing if I can't figure it out. I thought Apples were meant to be user friendly.

How are you trying the backup?

I force a separate backup by doing this: Plug in the iPad, then when it shows up on the left hand side, right click it and you'll see a few choices including "Transfer purchases", "Backup", "Restore from backup", etc. Select "Backup". If that's successful, then you can manually install 3.2.2.

That's how I backup/update my iPad all the time. I updated to 3.2.2 last week with no issue.