I did it at 6 am in USA. Error message sometimes are total BS.

Back up your stuff
boot into maemo
connect to a winPC running PC suite
update software updater, takes 3 minutes
reboot your winPC
get back to PC suite, it took about 2 minutes to find your N900, just wait
click software updater, follow instruction, dont touch anything until the PC screen said it is done, your N900 will flick a few times as if it is done or dead, but dont touch anything..till the PC screen said it is done updating
reboot, restore backup, enjoy
whole process took less than 10 minutes!

Nitdroid nuts: this does wipe out your nitdroid, so backup apps and desktop before upgrade. After upgrade, redo your nitdroid installation just as you did before, go to my thread, nothing changed, same instructions, same exercise, same outcome, in about 8 min. No big deal.

It restores your wifi key, and almost most your app, not all of them, some apps need manually add

bun