Updating to iOS 5 through iTunes In Perpetual Backup

My wife has an iPhone 4 and we've been trying to update it to the new OS. When iOS 5 came out it downloaded into her iTunes just fine it seemed. When she hooked up her phone to update it, it notified her the update was availalbe, if she wanted to transfer some apps to the iTunes store, etc. etc. We clicked update, it "prepared the phone for backup" – took 20 seconds – then proceeded to be in backup mode for a very very long time.
I'm kind of curious of our options here.
1. Can we re-download the iOS? Not sure if this is possible, but truthfully it doesn't seem like a problem with the iOS itself, just the computer/software.
2. Is there something within iTunes we could do to fix her connectivity with the phone? I know you can manually choose to back it up somewhere, but the options in the windows iTunes are organized differently that the mac.
3. Or, I could just create a new user on my MacBook Pro and sync/backup her phone in a fresh iTunes that way, which would more than likely work. I still have a 3G, so there was no need for me to download the OS update.
I might post this on the iPhone page as well.
Any advice is much appreciated!

Consider the case closed.
Found this thread earlier in the day
https://discussions.apple.com/thread/3383758?tstart=0
But thought I'd post on here that the issue was resolved if someone came a looking.

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