Same boat. A fatal error has occurred while updating your device's software. Please try again. is the sub-error message.
The first thing to do is search the forums looking for someone who had the problem and fixed it. Which is basically what I am doing now.
If I find a solution I will let you know. Meanwhile start searching yourself and if you find it, then post it here (this was the first search result I got; so it was easy to find). I am sure there are more than just the two of us!