10.7.5 or 10.8?

I hear problem about updating to 10.7.5.  I just recently got a new macbook pro (MD314LL/A) and I tried to software update combo 10.7.5 and I tried this about 3 times but it has problem with downloading and it won't let me do anything further.  I also hear about 10.7.5 problems here and there... would it be better to just upgrade to Mountain Lion or is there any ways to update to 10.7.5 other than using software update?

One of the causes for that message has been that the computer being updated does not have a valid commercial version of the OS. In some cases, this is because someone manages to install an OS from another model's installer. This usually fails but when it works, the updates will fail with the message you got.
Another cause of that error message is that your computer has either a special developer version of the OS (which can't be updated) or has the server version of the OS.
Click on About This Mac and click on the OS version that comes up - when you click on it, it will provide a build number (which is a series of letters and numbers actually). What is that build number? I am going to guess that it is some special developer version or something like that.
I think you need to erase and do a clean install of the OS for this computer (unless the trusted seller can explain to you exactly what version of the OS he/she installed). If the computer has original install media, use those to erase and install a new OS. Or if your model has the recovery disk feature (I think it does), try to boot into that following these instructions from Apple in order to reinstall a good OS version.   Instructions from Apple: http://support.apple.com/kb/HT4718

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