I have the same issue. The update comes down and I tap the button that says Reboot and Install and the phone never reboots. I've called Verizon and they don't know what to do about it.
This article solves the issue of the phone not rebooting:
Second GB Update/Patch Won't Reboot Issue - SOLVED! - Android Forums at AndroidCentral.com
This article shows ways to get the update message again:
For those who want the second GB update/patch - Android Forums at AndroidCentral.com
Option 3 ended up being the one that worked for me.
jovelster was right on!
After weeks of waiting for (an unspecified) bug fix and searching through countless threads, I tried the instructions in the beginning of this post (again).
Even though though my phone's internal memory appeared to be relatively empty (over 75% free in all areas), I continued to get the "Low Space" messages if I tried to install the update. Also, like others in this thread, after a failed update, the next attempt to update would not reboot the phone like it is supposed to.
The root problem did appear to be memory though. After I (finally) deleted all of my text messages, I was able to follow jovelster's instructions and successfully complete the update to 2.3.4/184.108.40.2065.2.
Be patient and persistent with the instructions. I followed them exactly as stated in the front of this post. Each attempt I had to change the date (Nov. 9, 2012 worked for me - finding a date that would stay was probably the most frustrating part), restart into the Boot menu and wipe the cache partition (this is the part that allows the next upgrade attempt to actually do the reboot), then send the 'check-in' code.
Initially, I deleted messages until the blasted 'Low Space' icon disappeared. That did not do it, I continued to get the Low space message when trying to update until I deleted ALL of my text messages. Truth be told, I probably should have tried deleting messages to/from my wife first, as that was the longest thread by far.
Anyway.. all of this to say, Thank you to jovelster!
I did the recovery clear cache thing to let the update install on my phone. After I did that, I clicked the update and clicked for it to install and my phone turned off as it should. The black screen with the phone and the green reboot sign came up as it usually should, but then a red question mark appeard and it didn't install. Then it my phone turned off, and the the white screen with Droid Incredible came on, and then my phone turned on. My phone has Android version 2.3.4. I got 2.3.4 off the Internet. Can you guys help me out?
I finally got the new update (4.08.605.2) without any special shortcuts. I did try jovelsters directions at first and everything seemed to work until it said at the very end that i didnt have enough space. I proceeded to delete all of my text messages and emails, then tried the following (figuring that maybe i just needed more space on my phone to install the update normally):
1. Move all apps that you can to the SD card
2. I had to delete ALL of the text messages and email messages.
3. Change the date on your phone at least one month ahead (will have to uncheck the "automatic" date and time) in settings. I'm not sure if this step is absolutely necessary but it's what i did.
4. Go to settings>about phone>system updates. i clicked on the new 4.08.605.2 update and it did its own thing, restarted on its own
Hope this helps