In my earlier post I told you about iPhone Error 1603 issue and here is another issue which I faced while  updating my iPhone to iOS 4.1. After few unsuccessful update, I started getting message on my iTunes:

iPhone Update server could not be contacted.

This is again an unusual error as everything was working fine for me and all of a sudden I started getting this error. To resolve this issue I followed following steps, which might help you to resolve iPhone update server issue:

• Check your Internet setting. You should not be connected via Proxy.
• Restart your modem.
• Restart your computer.

Out of above three, for me restarting my computer fixed the issue. If you are also stuck with iPhone update server could not be contacted issue, I would suggest restart your laptop/computer and it might work for you as well.