The update was eventually taken down, and the following statement was made on their knowledge center post:
"UPDATE: 7/2/2008, the PlayStation 3 system software version 2.40 has been temporarily taken offline and will not be available for download as our engineers examine any possible issues with this update. The Knowledge Center will be updated with information as it becomes available; please check back here for further details."
If you’re one of the affected, we advice you to wait a bit before you decide to format your PS3 to fix this issue. Hopefully, Sony will come out with a fix soon.
me too no problem 
