Robert:

Just did the update...Took close to 10 minutes here, too

I was not prompted to upgrade. I had to click the 'look for upgrades" box.

Perhaps because i have a 'older' iPhone, ie not 3g? Don't know.
Just wanted to share my findings.

To Suzanne: They called me crazy when I insisted on getting the 16 gig model. It is ever so comforting to know that one has room to expand.

Doug