After spending 3+ hours with numorous tries to download the update, the same thing happened to me last night. Basically, my PC stopped detecting my ipad, and I had to reset the ipad and restore... Except I haven't backed up my ipad since August as it took easily 12 hours. I lost a lot of my work...
However, there is a bright side where after this restart, my backup time dropped down to more like 5 minutes and I plan on backing up everytime I synch. It's weird as I have installed all my apps and contents this time; I don't understand what caused the super long backup.
Anyway, new OS and a new start.