Many are experiencing Error 3200 when trying to install iOS 5 on their devices. This is definitely a server issue. Even though you have already downloaded the firmware, iTunes checks in with Apple to validate your device and the ipsw file. Apple’s servers are busy as heck right now, so it may cause issues.
Hit the jump for a bit more on this issue.
Apple servers are being hit hard as everyone tries to update their software. There, unfortunately, isn’t much anyone can do about this other than keep trying until it works. It’s not an issue with your computer or your iPhone as far as we can tell. Just keep trying, and cross your fingers.
Know that rebooting, restoring, etc. will do nothing to change whether or not it works. You just have to be patient.
Those looking for iOS 5 can also check out our direct download links here.