I was trying to update to the new software and so I plugged into the desktop and tried to sync my device. I unplugged it and then I plugged it in again. Now my entire database has been erased!! I'm so upset!
I contacted Kobo CS and they were able to help me reset and get back the 100 free books and the books I purchased from Kobo (I have to go home and sideload the rest via Calibre). The CS rep told me that the update is having bug issues and that it would be best to wait a while (no time frame given) prior to trying to use the new update.
So... update if you like but beware.