Just wasted 2 hours of my life and a Gig of my download bandwidth trying to update my iTouch to the new v2.2 firmware using iTunes pos.
Anyway after 3 attempts at downloading 247 megs and getting an Apple network timeout error each time the downloaded just finished, I managed to find an answer after about 30 mins googling.
Turns out, if you get this error, you need to disable your antivirus and antispyware apps before starting the download.
I know it's good prectice to disable AV before running an installer but never heard of having to do it to allow a download to complete.
Apple - Crapple!
Hopefully this will save somebody else some time, effort and angst.