Unboxed the thing and jumped right into the setup. After the Wifi and BB ID part, it did an automatic update software check and found OS 1.0.8.6067 was available, then automatically proceeded to download, however it failed and only option then was to reboot. So reboot......then it says the automatic update failed, would you like to retry now OR turn off and retry later. So I retry now of course.........failed again about 40 or 50%.....and so it goes. I am on my 5th retry now, and basically it would not allow be to boot with the shipped OS, just keeps forcing me to retry the new OS download! GRRR!!!
You can try a full restore using the Blackberry Desktop Software. Shut down your PB completely (hold power button until it turns off). Connect your PB to your desktop via USB, it will say it can't connect, ignore this and select restore. It should take a few minutes to restore to factory defaults. After that start your PB and you will have a whole new configuration.
Since it shows that it was unable to download the update, I would still see if your wifi is working correctly. It didn't say that it failed to install it, it said that it couldn't download the file.
OK MY PB GURU BUDDIES!! I had a Homer Simpson moment there...WiFi was the issue (somewhat). Actually, I noticed my laptop kept losing the default GW for the WiFi network ever so often, so I turned off the wifi on the laptop and noticed the progress bar start to move. I left the laptop off and let Mr. PB do his thing........VOILA!! download completed. Not sure why these 2 devices were clashing, but I rebooted my Wireless router and both Laptop and PB seem to be co-existing peacefully thus far.