UPDATE ON THE UPDATE: The PlayStation Blog just commented on the matter. Here’s the official word.

As has been reported on many gaming blogs and websites, we have temporarily taken Firmware v2.40 offline. We’ve received a limited number of calls from consumers experiencing an issue with installing the system software update on their PS3. While our consumer services department has seen a low volume of calls on this topic, we are committed to providing the PS3 community with XMB access features delivered in the v2.40 update. We are working diligently to isolate the problem for those few consumers and to identify a solution before we put the firmware back up.

Kotaku is reporting that Sony is pulling its v2.40 update. There’s been reports of people having hardware problems after downloading the firmware upgrade. Folks are reporting the system hanging on the wave during the start screen.

Hmm, this doesn’t look good.