Microsoft said that most of those affected had either a bad internet connection or too little storage on the computer that the update was being installed from.
The company's blog posting directs users to an online troubleshooting guide, as well as suggesting they visit its Windows Phone forum.
Many of the postings on that site detailed users' attempts to restore their phones.
Lphilly79 wrote: "I disconnected the phone, removed the battery, and the phone booted up again into the original ROM (v7004).
"No obvious changes were made and everything is seems ok, exactly the way is was before the upgrade attempt."
One member, called Eliuzhi, appeared to have had less luck: "Now my phone is bricked I can not do anything!"
Microsoft has said that it will issue a new update as soon as it has identified how to fix the problem.
The company is currently trying to grow its share of the lucrative smartphone market, having lost ground to Apple, Google and Blackberry.
It recently announced a tie-up with Nokia that would see the handset manufacturer running Windows Phone on its smartphone devices.