Apple released the iOS5 update around the usual time of 6pm GMT, and quickly people started reporting errors. The update process backups up your entire device, downloads the iOS5 update for your specific device and then contacts Apple to verify the update update can be applied to the device. This is where people are running into problems, receiving an error message stating:
The iPhone could not be restored. An unknown error occurred (3200)
It seems the Apple servers are completely swamped and unable to perform the verification process quickly enough, so iTunes halts the update process and produces the error.
The good news (and bad) is that there is nothing you need to do, simply keep trying. I had 8 unsuccessful attempts before it magically worked on the 9th. Nothing different, just happened to ping into Apple at the right moment.
So many people are having problem “Error 3200” is even trending on Twitter!
22:41 – Update: Most peoples issues are resolved now and updates seem to be going through smoothly.
23.05 – Update: Nope, many people are still having issues with a new 3004 error code, with the phone locked in DFU mode (phone only shows the ‘connect to itunes’ image). Not sure at the moment if this is also related to traffic levels at Apple of another issue entirely.
23.34 – Update: After numerous further attempts at updating, disconnecting the USB cable and shutting iTunes down after each one, my iPhone finally got past the 3004 error and came cleanly into iTunes, which prompted me to do a restore from my most recent backup. It appears this error will self-resolve given enough attempts, but this is certainly the most broken iOS update rollout I have seen from Apple.