The fun thing about iOS is that when an update goes wrong there, you always know who to blame: Apple (unless the device is jailbroken, in which case, it could be something else). When iOS 4 ended up being a disaster for many iPhone 3G owners, it was Apple's fault, plain and simple. With Android, the situation is incredibly murky, but then again, that's mostly because many Android devices simply aren't updated at all.
Windows Phone 7 is supposed to be the middle ground, and it seems Microsoft is having some issues there. It's currently rolling out a very minor and small update that only addresses the update process (a test update, probably), in preparation for the first big update next month. If you were to believe some of the hyperbole headlines, the entire process has been an utter disaster. If you look more closely, however, it seems it's not as big of a problem as some want to make it out to be.
Only one device is affected, and it's the Samsung Omnia 7. Of the Omnia 7s in the world, only those models running an older firmware may encounter the problem, which manifests itself in two ways: either the phone reboots during the update process but without the new update installed (bad but not disastrous), or it will actually get bricked (very bad!). Turns out that Omnia 7s running the older JI9, JID or JJ4 firmware versions could potentially run into problems.
Microsoft has halted the already staggered rollout of the update, at least for Samsung phones. It has already isolated the cause, and is working on a fix. In the meantime, the company instructs owners of bricked phones to exchange them at the stores where they bought them.
Other devices - LGs, HTCs - are not experiencing any problems and are updating just fine. This raises the question - how can something like this slip through? Well, I think that's because Microsoft did not test the update against the particular firmware versions that are causing problems for some Omnia 7 owners. Since no other devices are having issues, I'm simply guessing Samsung either failed to properly inform Microsoft about all the different Omnia 7 firmware versions, or that Samsung was clear but it got lost in communication somewhere.
Either way, it's mostly a PR issue, since the number of affected users appears to be small. On top of that, issues with smartphone updates are a-plenty; the aforementioned iOS4 issues, but also issues with 3.1, Sprint's HTC EVO fail, Samsung's Vibrant Froyo bricking in Canada, and so on.
Still, this is not fun for affected users, and it's not something Microsoft can use right now. I'm still waiting for the update on my HTC HD7, but I'm in The Netherlands where WP7 hasn't been launched yet, so I might be last in line. Hopefully I can report yay or fail while this story is still relevant.