Just in case you too are having a problem updating your iPhone 3G under Vista. The symptoms I had were that after downloading the update, the process stops with iTunes showing a dialog complaining about “network connection to  iTunes Store could not be made”. The phone will be displaying it’s activation image and only allowing emergency calls.

(from Apple Website)

If you can get to the Store by clicking on the “iTunes Store” link inside iTunes, then you’ll be pleased to know it’s probably nothing to do with your network. You probably need to do the following:

  1. Shutdown iTunes
  2. Find the iTunes application and run it as Administrator. On my (64Bit) install it is in: C:Program Files (x86)iTunesiTunes.exe. Right Click on it and select “Run as Administrator”.
  3. If you have not done so already, unplug the iPhone and then re-attach it so iTunes picks it up. (I had to do this twice before it came up).
  4. Select the device, if it does not do so automatically
  5. Presto, it can now perform activation, and you should be greeted with “Sync in Progress” on the iPhone.

Most of the above is hidden in this help page at apple: Update and restore error messages on iPhone and iPod touch.

However – having to run applications as administrator to activate the iPhone – FAIL!

Good luck.