According to a few tipsters, the iTunes activation servers that help do everything from activate brand new iPhones to getting new firmware for iPod touches are dead to the world.
Tipster dik said "[A]s of right now, [Apple Retail] has lost all connectivity with the iTunes activation servers. No idea how long this will last, but everyone who is in line right now can expect a MUCH longer wait."
This also affects people trying to update to the 2.0 firmware from home, via iTunes for the iPhone and iPod touch. There's a good chance that's where the "We could not complete your iTunes Store request" errors are coming from. Unfortunately, this means that many users have their iPhones
bricked temporarily disabled, and only able to make emergency calls.
Apple is aware of the problem and is working to correct it, according to a discussion thread in progress.
If you have any information about what's happening, feel free to tip us. Thanks!