Specifically, we're told that the "backup gets stuck at 100% (Step 7 of 10) and the update doesn't carry on". So while the phone is still usable (luckily), users can't proceed with the update which also means the 'NoDo' update will be out of reach as well. This isn't just one or two people either as @winhonesupport is dealing with quite a number of user-generated problems with the same description.
Windows Phone Support is already on the case, looking into what is happening exactly. So far though, this seems to be Samsung/Omnia 7 specific, so for now we'll have to advise those to wait a bit before updating.
Thanks, Steve F, for letting us know!