tbh I think I know what the problem is, I had the same issues trying to perform the firmware upgrade from eclair to froyo.
I tried maybe 30/40 times but kies just refused to let the upgrade start, it seems that because I only have a dongle as my internet conn, it doesn't recognise it as a suitable source.
I came to this conclusion after going to my m8's & doing the upgrade 1st time on a bb connection. I also found that lots of other users were having the same trouble who also had very slow internet speeds.
The strange thing is that I can dl kies from the Samsung site but not the upgrade, I have checked last night to see if the Samsung site is offering the 2.0....12 version but they are still only giving the .49 version.
