This error you get if "something went wrong during install"
Restarting usually resolves that error, but here's a couple other things to try. Go to Settings -> Applications -> Internet Explorer -> Delete History. When that finishes, do a soft reset with Power and Volume Down. After it's back on, go to Settings -> Date+Time, and turn off Update Automatically and make sure it's set correctly check. Check if you have sufficient free and then try the update again.
You need a stable wifi and because the update is more than 100 mb you can not use data (wifi only)