Can't upgrade my ipad2 to ios5 .. itunes says ipad update server not found

I have my main desktop I use for setting up my new iPad2.  Syncs fine, but when I tried to update to ios5, keep getting message that ipad update server is not available, check internet connection.  Itunes sees the internet, because it allows me to connect to the istore .. etc. Changed cables, I have tried it with firewall on, and firewall off .. makes no difference.  The test shows no connection, but you can see by the diagnostics that it did connect.
PC is XP Pro,
I could connect fine from my laptop, working on same home network, however if I upgrade, it will dump all my apps .. I don't want to lose everything.
Is there a way to unsync my desktop, then sync with my laptop instead, backup, then do the update from my laptop?
Here is the info below ..   Thank you ..
The diagnostics file shows;
Microsoft Windows XP Home Edition Service Pack 3 (Build 2600)
Gigabyte Technology Co., Ltd. G31M-S2L
iTunes 10.5.1.42
QuickTime 7.7.1
FairPlay 1.13.36
Apple Application Support 2.1.5
iPod Updater Library 10.0d2
CD Driver 2.2.0.1
CD Driver DLL 2.1.1.1
Apple Mobile Device 4.0.0.97
Apple Mobile Device Driver 1.57.0.0
Bonjour 3.0.0.10 (333.10)
Gracenote SDK 1.9.5.502
Gracenote MusicID 1.9.5.115
Gracenote Submit 1.9.5.143
Gracenote DSP 1.9.5.45
Current user is an administrator.
The current local date and time is 2011-11-27 20:39:51.
iTunes is not running in safe mode.
WebKit accelerated compositing is enabled.
HDCP is not supported.
Core Media is not supported. (16002)
Video Display Information
Intel(R) G33/G31 Express Chipset Family
**** External Plug-ins Information ****
No external plug-ins installed.
iPodService 10.5.1.42 is currently running.
iTunesHelper 10.5.1.42 is currently running.
Apple Mobile Device service 3.3.0.0 is currently running.
**** Network Connectivity Tests ****
Network Adapter Information
Description:          Realtek RTL8168/8111 PCI-E Gigabit Ethernet NIC - Packet Scheduler Miniport
IP Address:          192.168.1.99
Subnet Mask:          255.255.255.0
Default Gateway:          192.168.1.1
DHCP Enabled:          No
DHCP Server:          255.255.255.255
Lease Obtained:          Wed Dec 31 16:00:00 1969
Lease Expires:          Wed Dec 31 16:00:00 1969
DNS Servers:          192.168.1.1
Active Connection:          (none)
Connected:          No
Online:                    No
Using Modem:          Yes
Using LAN:          No
Using Proxy:          No
SSL 3.0 Support:          Enabled
TLS 1.0 Support:          Enabled
Firewall Information
Windows Firewall is on.
iTunes is enabled in Windows Firewall.
Connection attempt to Apple web site was successful.
Connection attempt to browsing iTunes Store was successful.
Connection attempt to purchasing from iTunes Store was successful.
Connection attempt to iPhone activation server was successful.
Connection attempt to firmware update server was successful.
Connection attempt to Gracenote server was successful.
Last successful iTunes Store access was 2011-11-27 20:27:00.

It's my understanding that you do not need Lion on your Mac but you do need the latest version of iTunes. If you already have this, there may be some other problem.

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