I'm having trouble, too.
I have bad cell reception in my house and at the office, but I still tried both locations multiple times.
At first, it downloaded once, then rebooted and stopped around 25% with the IP Failed Previous message (or similar).
I also got a few out of memory errors, so I moved tons of apps to SD card.
Now I still get the failure while it tries to apply the update.
Any ideas on how I can fix this without having to factory reset?
I now have over 600MB free of application memory according to App 2 SD...