Usually when unpluging the USB you need to unplug it directly from the device. Sometimes it takes a while for it to register that it was unplugged. Leave it on your desk like that and wait 5 minutes if the screen is still reading Connected and Charging there might also be a problem with your USB cable or computer.
I personally have had a lot of trouble with my computer USB and the Kobo. Other computer work great. The Kobo seems to be more sensible to USB issues. Might be a loose cable or something with the OS.
Try it with another computer / Cable. Try the setup via a Windows computer or partition.
If it does freeze hold the power button for a couple of seconds leave it like that and try reopening it, that will usually restart the device and if the update was uploaded to the device it should do the update and restart.
I haven't had these problems with my Glo but with my old Touch it would take a long time for the reader to register that it had been unplugged. If anything fails just exchange it to the store. Sometimes the USB connector might be loose.
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