Many users upgrade their standard Sony-issued hard drives, especially if they own PS3s that started with tiny 20GB or 40GB HDDs.
If you are having trouble, Sony has suggested switching back to your original PS3 HDD to get the update, first.
Says Sony: "We apologize for any inconvenience you are experiencing with upgrading Internal Hard Disc Drive (for PlayStation3) on your PlayStation(R)3 computer entertainment system. The information available to our Consumer Services Department does not suggest that this is a problem PlayStation(R) owners are likely to experience when upgrading the HDD with 3.41update. Sony Computer Entertainment America (SCEA) strongly supports the quality of its products and backs them with full confidence."
We ask that you update the previous HDD first to see if the update will go through. Then update from the thumb drive that is formatted in FAT 32 and has the 3.41 update downloaded."