Ok so my update experience lasted about 13 hours. I tried everything I read, this is what worked for me. If your having problems and have tried everything, try this once more!
Phone: Samsung focus v1.3
Carrier: AT&T
Updating from 7290
1. Uninstall Zune
2. Re-install Zune
3. Allow windows to install ALL drivers first before doing anything else
4. Load up Zune with phone connected via USB cable
5. Go to phone tab
6. Click sync options or relationship (it will actually ask you to enter the phone name first, name it whatever u want)
7. Click sync options again
AT THIS POINT BE PREPARED! SOME PEOPLE ARE SAYING GO AHEAD AND CLICK THE UPDATE TAB AND SEE IF IT LETS YOU UPDATE WITHOUT TRICK. DONT DO IT! BEFORE YOU CLICK THE UPDATE TAB HAVE YOUR HAND READY TO PULL OUT YOUR NETWORK CABLE FROM YOUR PC.
8. Click update and wait until the status bar goes all the way acrossed and stops, pull out cable immediately!
9. Wait! If it tells you it couldn't connect to check update, repeat step 8 but wait a half second longer to pull the cable out and disconnect from the internet.
10. When it tells you to update plug the cable back in wait about 15 seconds and click update.
I think the key for some people may be uninstalling and re installing Zune. I tried a million combinations etc etc. I am not exaggerating on how long I spent trying to figure this out and make it work.
Also take note that the update process is lengthy, sometimes it doesn't seem to be doing anything, just be patient. Also my Zune client got "stuck" on step 6 several times, and also on step 8 ( both restarting phone steps) if it gets stuck on 6 for more than about 30 minutes you will have to restart Zune and try the process again. It took several times before it cleared this step. If it gets stuck on step 8 don't worry, the update has already installed. Just restart Zune and move on to next update.
Be patient! I thought it was bs until i uninstalled Zune and gave it a fresh start. Some people are saying as soon as you click update to yank your internet connection, but this also didnt work for me, it only worked after the little multi colored status bar was complete for about 1/2 - 1 second and then disconnecting.
Good luck, maybe this will help someone else. =D