iPhone update worked (but took maybe 2.5 hours to update and restore everything), but the iPad failed. After 15-20+ attempts, the upgrade finally worked, and my iPad is currently restoring apps (which will be followed by restoring music & videos -- this will probably take another 3+ hours, but at least the difficult firmware upgrade is done).
Apple's servers are currently horribly overloaded, and the upgrade process requires that they be contacted (in addition to downloading the upgrade). If iTunes has trouble talking to Apple's servers, the upgrade is going to fail. There's nothing that you can really do about this, except wait and retry.