I have the exact same problem, received unit this evening, plugged in, connected to router, connects to internet, updates fail. At this point you can do absolutely nothing with the unit other than start the process all over again, which I have done about 25 times now.
Does exactly the same whether connected via CAT5 direct to router or via wifi.
I was looking forward to setting up and playing with this unit over the weekend, maybe they are only £49.99 now because they have a load of dud ones to get rid of
I'm still hoping it can be resolved so if anyone has any ideas, I'd be very grateful to hear them.
Andy.