I have always updated my iDevices just after the new firmware was available, and never experienced any problems. Unfortunately, installing iOS 5 was not as smooth ride as I expected it to be.
To my surprise, iTunes has reported errors 3004 and 3200 several times, and my iPad remained stuck in DFU mode. I have quickly googled to check if none has similar issues to mine and read several posts on forums. People suggest to add a manual entry for Apple’s gs.apple.com to the hosts file.
Unless you have jailbroken any of your iDevices, just be patient and keep trying every now and then – it will update at some point. If you did jailbreak any device on your computer, it is possible that the jailbreaking tools has added an entry to the system hosts file.
To check if your computer is affected:
- Go to C:\Windows\system32\drivers\etc\hosts
- Remove any entries regarding gs.apple.com
Once done, just keep trying to restore your iDevice every few minutes.