Error -3259 while downloading OS 4 update for iPod touch

I am trying to update my iPod touch 3G OS from version 3.1.3 to 4.0. I am using the latest version of iTunes(9.2.1.5) for doing it. When I download the update, it gets downloaded fully (366.4 MB/366.4 MB) but in the last moment, it stops downloading and reports a error message saying that the connection is lost. I tried doing it many times but still I get the same error.However, I am able to download all the other apps from iTunes store without any difficulty.
I tried restarting the computer, adding exceptions to windows firewall and everything that is given in this link related to err -3259 http://support.apple.com/kb/TS2799 but none of these seem to help.
Can someone help me figure out what the problem is? Thanks in advance.
Message was edited by: radheshyam

I get exactly the same error.. but found no resolution yet.
The problem is my iPhone is not working,, requires restore and it forces me to update...
i click on Restore & update.. go through the download process and then - poof - get the above error!
Help please.

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