I'm having the same problem as PeterT -- the Kobo upgrade program running on Vista 64bit can't detect the Kobo in upgrade mode, even though I'm certain the Kobo
is in the required mode. Same error in the Device Manager (though I haven't delved into the Event Viewer logs). Vista seems to ask for device drivers yet can't find any.
Also, I had a problem on Win7 64bit with an early stage of the Kobo upgrade program not being able to eject the ereader. I don't believe there were any processes tying it up, but I don't have the technical know-how to confirm this. (I did close all windows and programs that may have been accessing the Kobo's drive in some way, as well as do the obvious such as Remove Hardware Safely, etc.) After multiple times, I managed to get through to the other stages of the upgrade process by pulling out the USB cable juuuust before the upgrade program finished downloading. In the end, glorious success.
I realise that Win7 is an odd beast and probably the problem is my computer, but I hope there's some sort of solution for the Vista issue. I think I was lucky with my Win7 machine, and I really dread having to use the WinXP 32bit computer for future firmware upgrades.