Here's how I fixed this on my MacBook Pro.
With your device connected, in iTunes, Option-click the Restore button.
You'll be asked to select the file to use to Restore. Go To Folder (Command-Shift-G): ~/Library/iTunes/
then into the proper "XYZ Software Updates" folder ("iPad Software Updates" for example), you'll find the file to use to update.
If you have more than one, select the one that ends with "5.0_9A334_Restore.ipsw".
This resolved the "internal error occurred" I had with my iPad 2.
Make sure you read the warnings that pop up during the process; this will remove everything you have on your device, so you'll need a working backup, or a way to sync your data.
My ipad is now working ok and has updated to ios5.
I had a lot of problems updating it and really feared the worse when it locked up in restore mode.
When i tried to do the factory settiongs restore it couldnt even connect to the itunes store to validate the instal as it was so busy so i left it until the following morning and when i tried all went well with the restore and the ipad updated to ios5 without any more hitches.
I would have thought Apple would give you help irrespective of whether you use a mac or pc,and hopefully there willbe enough people on forums to help with whatever the problem.
If i can be of help in anyway please feel free to ask,im not an expert but i will always try to help if i can.