BTW, My gf's iPad suffered the same fate. I updated on a windows 7 PC it failed...locked up and locked iTunes everytime I tried.
After 3 tries of that it filled the hard drive and totally screwed things up. I backed up the backup data, reinstalled iTunes tried again, same problem.
I reinstalled Windows, same problem. I put the backup file onto my Mac....SAME PROBLEM!
So at 10pm last nite I had to give her the bad news....she has to start over again. I put on some apps that I have on my comp...but all of her notes and flash cards are gone...I'm really pissed at this! This should not be the case!!