I had a issues trying to update, I did have mine modded with ringtones and changed sounds for email and SMS, which meant I would have to go through the restore process. No big deal or so I thought, my iPhone went into recovery mode, and iTunes commenced to downloading the 91.2mb file, as soon as it finishes downloading I get a error that read: "There was a problem downloading the software for the iPhone. An unknown error occurred (-48)"
After several attempts, I decide to call Apple, once I get a product specialist on the phone, we try numerous options, including deleting and reinstalling iTunes, along with deleting all iTunes file from the Library folder. Nothing worked, then he put me on hold a few minutes and came up with one other solution, told me to create a new user account on my MacBook Pro and login using it, well it worked, it downloaded the update and installed it without a hitch. He still had no idea as to why my usual account wouldn't allow it but got me up an running again.
I really wonder myself about what the issue is, I even tried it again using my usual user account and got the same error, then went back to the one I created and it worked fine. Has anyone else seen this?