Thanks to the huge slam to Apple's servers, some users are still experiencing the "Server could no be contacted" error message.
As we mentioned a few hours ago, this is simply the result of massive amounts of data flowing out of Apple's servers. Earlier, it was interrupting updates. It happens. Before you throw your arms up in frustration, know that things will work out, but it may take a few tries and some patience.
Still, this seems to be a very popular update for Apple given the server problems. Maybe it didn't help that they issued a press release and everyone was standing by for it.
By the way, in case you are having any other issues with iOS 4.2, check out our quick tips, or the rest of our info on iOS 4.2 so far: