I too had problems upgrading my iphone to v2.0. I understand the problems of such high demand, but Apple had every opportunity to get hold of the problem and mitigate the damage to users and themselves - and chose not to.

My case: I checked apple.com for breaking news and checked the support forums. Nothing noting any problems with existing iphone users upgrading the software. I did check for updates and iTunes downloaded and installed 2.0 with no problems - until the last step: Activation. When it failed and a reset didn't clear it, I was frustrated, but OK these things happen. That's why I bought applecare.

I called applecare. They explained the problem and I was incredulous. The conversation went like this:

Me: "So, Apple can't complete the updates and activations that are being requested. Yet, they are continuing to distribute the update and allow users to start the process and they put no notice on their website, no entries in the support forum and no warning when you do the check in itunes? And now I'm left without a phone until Apple is good and ready?

Applecare Tech: Oh there was a notice on the web... at Macrumors.com.

Me: Macrumors is now an official Apple site? Aren't they the people Apple sues for speculating on Apple events?

Applecare Tech: We work with them sometimes.

That short conversation pushed me from mild frustration to hopping mad.

This was totally preventable. Apple should have anticipated the demand and managed to it. Some things they could have done (and hopefully will do in the future) 1) Begin distributing the updates to existing users early and save the resources for new activations for launch day. This was a no brainer. Surprised by the demand? Come on - you knew there were over 5 Million iphones in circulation already.

2) As soon as the server problems started, put a notice on the website and warn your customers - put a system availability indicator up. Many of us would have waited and been happy to do so.

3) Put a warning message up on iTunes or pull the download. If I had been warned, I could have made the choice to wait and avoided a 4 hour bricked phone.

4) Mobile Me - Again, scheduling. Personally, I don't use dotmac as a primary service, but some do. Was mobile me something that had to wait until launch day? Really?

I love Apple products and I'm a fan of the company. The problems were avoidable, but the ultimate failure is the response - or lack there of. They could have read from the book of customer service 101 and helped their customers, but instead they crapped all over them. Again, even if you allow for them being surprised by the demand (which is false... 5+ Million iphones already out there) the response was a deliberate choice. A warning, simple, easy to post on the web or distribute in itunes would have helped customers and their servers (by getting people to wait).

I'm disappointed because they didn't learn from the lessons of the first iphone launch, which actually was much smoother than iphone 2 (and 3G). I hope they learn it now. As Merlin pointed out on MBW - the lost opportunity to bring new customers into the fold as true Apple fans is staggering (As a stockholder this really hurts).

Credit Due: Things are working and I love the iphone 2.0. Mobile Me is working fine and I like the new interface and "push"... now let's look at letting other providers do push: Hint-Hint Gmail, Gcal.