Update Apple TV 2nd Gen from 4.3 to 5.0?

Hi,
For some reason when I click on update software. It just say "update cannot be performed at moment, try again later" When I try to restore it says the same thing and when I plug it into iTunes and click on "restore" it gets stuck at 1st step "Contacting the Apple TV software update server" and does nothing!
What if anything am I doing wrong?
Tech specs
Apple TV 2nd Generation Model: A1378
iTunes 10.6
Mac os 10.7.3
Thanks in advance

Hi, gthank you for the quick reply, this seems really helpful, but I can't get the following to work, this is probably because I'm doing it wrong? Please note I am no apple genius!
1. How do I confirm the ATV is in DFU mode? I've followed the procedure. "hold down and menu" 6 seconds and "Menu and Play/Pause" for 6 seconds, This seems to reboot the device each time and doesn't appear to make any noticable changes.
2. How do I change my DNS Settings on my router? Is this something to do with network settings or on my actual router settings page? I've looked through the router setup and there doesn't seem to be any way to change the DNS setting to 8.8.8.8. In System Preferences\ Network\ Advanced\ DNS, I can add a DNS Server, Is that where it needs inputing?
3. How do I change the DNS setting on the actual ATV?
4. How do you change the Store location to US? Is this just simply a matter of changing the store setting at the bottom of the iTunes Store page?
Really appreciate any help, many thanks

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