I am posting this thread for the benefit of all 'newbies' to the android world. I have seen from other threads that people have had trouble getting their device to accept the Firmware Upgrades. I too was in that situation - until last night. I have read every blog I could and even spoke to a 'real person' at pocketbook about getting a 'no space available' message.
I had downloaded the upgrade to my PC and copied it to my SD card as instructed. I then took the SD card out of my PC and loaded it into the IQ - EXACTLY THE SAME WAY. That was my problem. The SD card had to be flipped over to be read in the IQ. It is the opposite to my PC requirement!

DUH!
After that, batta boom! batta bing! Everything loaded.
I want to thank everyone for their suggestions and help. This is a great forum to use for assistance.
Happy Holidays from the Great White North!