If you haven’t tried yet, try this (it is a common suggestion here):
1. download the update.bin using your pc
2. connect your phone with usb cable to your pc
3. copy the update.bin from the pc to the root folder of the phone using windows explorer
4. restart and press both vol+ and power together
5. select clear data option during the upgrade (sure you will loose the installed by you apps and also settings and contacts if they aren’t synchronized)
if you have the same problem try installing other firmware version or the latest stable 3.7.3 (or 3.5.2)
also compare the md5 checksums of both files, the downloaded and the source.
What version is it? china or international?