I had the same problem, and come to find out it was my firewall/antivirus causing the problem. Try turning off your antivirus software, do the update, then turn it back on... Worked first time I tried after turning the antivirus off, after about 20 fails with the antivirus turned on. Good luck

trying to update to OS5 and every time it says there was a problem downloading the software and the network connection timed out. the error number given on the downloads page is 3259. I've tried restarting the computer multiple times, also tried rebooting the phone... nothing works. suggestions?