You probably had a bad unit, or your unit went bad on you.
I've updated mine to the new firmware and haven't had a problem. In fact, it works so well - and has always worked so well - that I'm worried that, after almost 5 months of working perfectly, that something may be wrong with it!
I plan to buy the DX (well, seriously thinking about it would be a better way to express that), but I'm worried that it, too, will continue to work without any problems.
Personally, I would never go back to 2.03.
Don
I forgot to mention that I have the NON-INTERNATIONAL Kindle 2.