I'm also suffering with the same problem...
It gets stalled at "downloading 1kb"
I think that the repositories are having some troubles nowadays.
Hope that they correct it ASAP.

And no, it isn't our fault, a lot of people are going through this problem since last week.
That's lame.

Just for troubleshooting, my device is a N800, just reflashed it two times with the LATEST OS2008 version, doing different installations and having the same problem.