I use to have this problem with my Iphone 4 becuse the host file added during the jailbreak of my previous ihone (3Gs) would not allow the upgrade. It did not return to normal until I got rid of the host file info. Now now probs with updates.
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Yes, exactly the same thing happens on my Ipod Touch when syncing with ITunes 10. I have had nothing but pure grief every time there's an update of iOS. I get various error messages that ultimately result in my having to restore the iTouch to factory condition and the restores are unsuccessful (unknown error), so I lose all my settings, email accounts settings, game histories and levels, databases, etc. It's a nightmare. I have never seen such buggy software. It's happened three times now. Apple users crow about the great Apple products but I wouldn't iTouch one with a 10-foot pole if I hadn't already invested so much time and money on this damn iTouch.[/QUOTE]