Can not update iPod Touch to OS4

I downloaded and and tried to backup with no love. I keep getting an error message telling me the backup server could not be contacted. I read the kb article and have even turned off my firewall. This is really upsetting me! HELP!!!

Is this is the first time you have tried to load a new OS to your iPod? If it has worked before but you can't it now and haven't made any changes, the the most likely reason is that the new app just came out last week and the weekend might be the first time many users have had the opportunity to download the new OS and the server may simply be overloaded.

I've had this same problem trying to upgrade my 3rd gen iPod Touch (32GB) over the past weekend, and got the same server error message...
Anyone know if this has been resolved now, and the servers are responding?