Windows iTunes never finishes updating iPhone without bricking it...

So, I work at a mostly PC (Read: We only have two Macs - This kills me) job. The head of the company recently purchased an 8GB iPhone (2nd Gen), when the 3GS came out. Every time a new iPhone software revision comes out and he chooses 'update,' it grinds and whirrs until it gets to a point where on the screen it shows a progress bar and says 'installing software.' The iPhone shows a progress bar with the Apple Logo. They then sit there for, literally hours, as if displaying a screen shot.
The only solution, since I can't restore the iPhone on the PC (laptop running XP, btw) is to take it into the Mac room, have the latest iTunes install itself, restore the iPhone, THEN have it download the new iPhone software, RESTORE again and before it syncs, disconnect it and take it to the Boss' Laptop and have it restore from his backup. This works. But, it's an extremely shoddy way for someone to have to simply update their soft/hardware. This is also my first experience with syncing an iPhone via windows as I use nothing but Macs. The Manichean juxtaposition between the two processes is jarring.
Today, my IT (the only IT guy) guy tried to update HIS 16GB 3GS and EXACTLY THE SAME PROBLEM happened. And, he's currently reinstalling on the Mac so he can restore from backup on HIS laptop (XP). He says there's no ubiquitous software (other than Norton) on the machines and they both have admin rights... so, please help so we don't have to dance like this every time Apple releases a new update AND so we can maybe we can get new Macs in here (my logic is that if the iPhone keeps screwing up, they will then get a 'reverse-halo' effect - that would be terrible).

Upgrading the software has nothing to do with whether it's locked or not. Contact the cellular provider. They are the only ones who can help you with a locked phone issue.

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Thank you for providing the details of when iTunes becomes unresponsive. I found an article with steps you can take to isolate and troubleshoot an issue like this (click on the article for your version of Windows):
iTunes for Windows XP: Troubleshooting unexpected quits, freezes, or launch issues
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Thank you for using Apple Support Communities.
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Others have reported that if you have at least on contact and calendar entry on your new computer when you sync, then it will not erase you iphone, it will simply merge the two. While that makes perfect sense, I have not tried it myself.
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Good luck. I hope it works out.

Windows iTunes never finishes updating iPhone without bricking it...

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