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Its been 2 days since i purchased the phone and it has been nothing but disappointment. After facing issues with low loudspeaker volume,GPRS/3G connectivity,Bad network I finally decided to update the phone software using Pc Companion software. I downloaded and installed the software. The phone gets recognised and it also says that there is an update available. The update was downloaded and when i try to install the updates i am stuck at a screen that says "Follow these steps to prepare your phone for update" . I have installed all the rquired drivers and STILL i havent been able to get past that screen. I switched off the phone,waited for 30 sec,held down power button,plugged in the USB cable,but nothing happens. I do hear the USB device connection sound on my pc,but nothing on the screen. Tried the sony update service as well and got stuck on the same damn screen to setup my phone for update...Had 5 android devices in the past,this device so far has been a big pain in the a**. I wish i could return this phone and exchange it for something else .Can anyone please help me update this tiny brick 
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that's good, turn off your firewall and antivirus, did you restarted your PC after installing SUS?
if it doesn't work, try this
restart your PC -> turn off your firewall and antivirus -> don't run anything -> connect your phone on flashmode -> and wait for your PC to look for the drivers.
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How about
Update Service (SUS)
http://www.sonymobile.com/gb/tools/update-service/
http://www-support-downloads.sonymobile.com/Software%20Downloads/Update_Service_Setup-2.11.12.5.exe
Alternatives on How to backup Xperias
http://talk.sonymobile.com/thread/36355
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i did mention that even the update service cudnt help me out.....same issue...switch off fone,press volume down,plugin usb and nothing happens... 
could it be a hw issue?
does the LED notification light turn Green when you connect the phone?
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yes,when i hold down the volume down button and plug in the usb cable i do get a green light,but nothing happens after that.
that's good, turn off your firewall and antivirus, did you restarted your PC after installing SUS?
if it doesn't work, try this
restart your PC -> turn off your firewall and antivirus -> don't run anything -> connect your phone on flashmode -> and wait for your PC to look for the drivers.
Don't forget to mark the Correct Answers & Helpful Answers
i did reboot the system and also turned off my firewall.....il give it a try on another system.
keep us updated
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Thank you sooooooo much! It worked!
How do you mark correct and helpful answers here by the way?