Ok - I'm never updating my iPhone again. This sux - I finally get around to updating it and I get an error "The iPhone ...could not be updated. An unknown error occurred (1602)". It's a known iBrick party. WTF? I don't remember if that was the same error I got for 1.1.1.
This is pretty stupid. Both times I've updated the software it has failed and this phone has not been hacked. I learned a lesson, though - sync the phone first (that is, say 'No friggin way' to the update message when the iPhone is connected) and do a normal sync. Then go back and update the software if that's what you want to do. I've lost all the data on my phone since the sync yesterday. That means the notes and numbers, etc that I got from visiting family yesterday for Thanksgiving are all lost. Probably all the pictures too - though iPhoto may have gotten them first. Nice.
Oh, and restoring a few gig's of data? Ya - settle in. It takes a good while... I figure the battery will be mostly charged up by the time it's done, though.