Jusr recieved my unit yesterday and did the update no problem (apart from network traffic overload). Ended up downloading the actual image file seperately.

Seamed to work fine doing what you did. Just to repeat the process I did. After connecting to PC with cable.

1. Actually switch off device (switch off menu selection ok).
2. Hold down the upper of the 2 buttons on th front facia, the "swap" button (showing overlapping squares). Keep this pressed down all the time.
3. Press down the power button till it starts up + a second or two.
4. Release the swap button once you see a USB symbol on the right hand side.

If you are still holding the button down waiting for it after several seconds, it isn't happening...

If it still does not play ball, try removing the battery and putting it back in again or something.

I'm assuming the swap button does work during a normal boot (no hardware fault).

Zuber