Please verify the following things:
Make sure you have the correct download. The full file name is listed in the Directions post on the first page.
SD Card is FAT32
The MD5 for the download matches the MD5 posted in the Instructions post
That the file name on your SD Card is update.zip; not update, update.zip.zip or any other variant. (You can boot your phone normally and use any file manager to look at the SD card)
If one of these things is not correct it will not work. This procedure works. It's been done by me personally several times today, and many others here have gotten it to work as well.
Be patient in HBOOT, it takes time for the process to read the card and find the file. The bigger your card/more stuff you have on it, the longer it will take.