"Could not sign in. Please check your network connection and try again"

When trying to set up my daughter's iPod Touch Face Time, the same message comes up, "could not sign in. please check your network connection and try again". The wi-Fi is working (Safari & email works) and we're not behind a firewall. My daughter's Apple ID account is verified. Can't turn Face Time on in Settings, as you have to sign in to Face Time first, which we can't do. She has iOS 4.2.1, so the latest OS. Grrr. Any ideas? Thanks!