"We have identified a technical issue with the Windows Phone update process that impacts a small number of phones," Microsoft said in a statement.
"In response to this emerging issue, we have temporarily taken down the latest software update for Samsung phones in order to correct the issue and as soon as possible will redistribute the update."
The update was intended to improve the overall updating process and did not include new functions that Microsoft has promised will be forthcoming, such as cut-and-paste and improved search for its Marketplace.
The update is delivered when a user connects their phone to their computer using a USB cable. On Windows machines, the update is applied using the Zune software. On Macs, it is the Windows Phone 7 Connector Mac.
Microsoft introduced a radical redesign for its mobile OS when it released Windows Phone 7 in November. Microsoft has partnered with a range of manufacturers to install the OS, including most recently with Nokia. But the company faces strong competitors in the smartphone market from Apple, Google Android OS and Research in Motion's Blackberry.
Technical problems such as this one are not going to help.
"It's 1 am here in the UK," wrote Samsung Omnia 7 user Alex Roebuck, who has been communicating with Microsoft via its WinPhoneSupport Twitter feed, early Wednesday morning. "Have to go to work tomorrow with no phone. Very unhappy."