Just wanted to add that if the original poster has a recently-purchased Kindle 3 Wi-Fi with firmware version 3.0.2 (553210206), and has difficulties updating the firmware, s/he should take a look at this other thread on this forum:
K3 update 3.0.3 won't install, other updates will
Kindle Support told one customer with this problem:
I'm sorry to inform you that, you will not be able to update the software version of your Kindle to the early preview 3.0.3 version because the software version of your Kindle already has all the latest features and performance enhancements included in 3.0.3. This software version came pre-installed on your Kindle and is not available to other Kindle users. So you don’t need to update the software version of your device further at this time with 3.0.3, but you will be able to install all future software releases.
This is the case with me (I received my Kindle 3 Wi-Fi a week ago), and I'm not bothering to struggle with this update. Will wait for 3.0.4 to come along and then worry about it!