I just unpacked my new TouchPad.
I set up my webOS account and then went directly to "System Updates".
Everything seem to download fine.
It finally ended up on this screen for easily longer than 15 mins (see pic) .
So I gave up waiting and held down on the power button until it gave me the menu option to Shut Down. I then held the power button again, and it is now on a dark screen with a rotating circle in the middle, and at the bottom it says Installing Update.
I'll post back if it succeeds or not.