A valid point was raised above, but not addressed:
Is this an 8GB model, or a 32/64GB model? If it's 8GB, then you can't install iOS 5 on it anyway, so iTunes ought to offer to upgrade it only as far as 4.2.1.
If you have the 8GB model, would this be adequate? I know it would be a little bit newer than the version 4.0 you're asking for...