I tried to update from my computer and after two attempts I managed to download the update software but while installing and after some times I got a message saying that the install process failed! At this stage my iPhone was formatted and I have to restore the last backup after installing the software 5.1. The strange thing is installing the new update through the Restore process was very straight forward and easier than download & install process! After installing the iOS 5.1, the restoring of the last backup went very smooth.
Finally I did it and thank you all for your support.