I was doing the same software update and the phone would not switch back on. I took it to a local shop who repaired it for £20 but they've left T-Mobile markings all over the phone which as a 02/Tesco user is a royal pain in he rear end but luckily was able to restore my contacts through Pc Suite and my Bluetooth dongle.
Basically it seems to require a fresh install of the software but beware who does this for you!!
Sean, April 2008