As many iPhone users are scrambling to get their hands on the newly released iPhoneOS 3.0, Apple’s activation servers are taking a beating. While some customers find this a reason to complain (see this Apple discussion, others know that all will soon be well.
I was especially eager to get my hands on this new iPhoneOS 3.0 release to continue my troubleshooting procedures (see this post). In any event, there is a solution for users experiencing the “iPhone Activation Server Temporarily Unavailable” error message:
Connect your iPhone via the USB cable
Make sure you have the latest version of iTunes (8.2)
Click "Check for Update"
Select "Download and Install"
I you receive the error message, simply click OK and then click on the “Update” button. Continue doing this until you get through to the server and your iPhone 3G begins to update (it took me about 12 tries and 15 minutes).
Good luck!