On my 1080p HDTV, it's quite hard to read text from a distance and i for one don't like standing 2 feet away from my TV. I'm glad they changed the size of the text. although i agree every user should have the option to fix all this to fit their own tastes, I'm alright with this update and to be thankful it's free. also i been hearing some complaints about the multiple PSN store icons throughout the XMB. if you actually go to one, they display different information each time. it don't bother me either. but apparently people always have something to complain about though.
Concerning your issue, are you connected to PSN while trying to update? Have you placed the ps3 in your DMZ in your router so you won't have to port forward everything?
Although i agree that the grey boxes are ugly, it really don't affect me that much. i mean, I'm playing games more than i am staring at the XMB. also, they help see friends better if you're using a bright theme. install the "afrika" dynamic theme that can be found for free on japan PSN and see what i mean. 3.0 does make everything bigger but it's for the good. despite what you heard, the resolution hadn't changed, things just got bigger. the whole point on resolution is that objects and images are much more detailed as it changes how many pixels your TV can withhold.