Tess,
Try rebooting your phone. If this does not work then remove the SIM card reboot and insert the sim card. I updated my phone to 3.0 without any issues. Also please reconfirm if the phone is factory unlocked, You can do this by checking if your model Number is in the list below. ( This is an old list and Australia is not included)

ITALY TIM
MB489T/A
MB496T/A
MB500T/A

HONG KONG 3
MB489ZP/A
MB496ZP/A
MB500ZP/A

NEW ZEALAND Vodafone
MB489X/A
MB496X/A
MB500X/A

Singapore
MB489ZA/A
MB496ZA/A
MB500ZA/A

CZECH
MB489CZ/A
MB496CZ/A
MB500CZ/A
MB490CZ/A
MB497CZ/A
MB501CZ/A

Greece
MB489GR/A
MB496GR/A
MB500GR/A

Luxemburg
MB489NF/A
MB496NF/A
MB500NF/A

Russia
MB489RS/A
MB496RS/A
MB500RS/A" T

South Africa
MB489SO/A
MB496SO/A
MB500SO/A

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