iTouch Update ERASED 60 GIGS!!!!!

This is rediculous!!! What type of "UPDATE" erases EVERYTHING when it fails?????? I just "Updated" my iTouch, it couldn't backup because I don't have 60 Gigs on my computer (and I'm sure no one else in MAC land does either! ) It updated the software, i guess failed... looked like it worked, then said it's returning to factory settings, found an old back up from three onths ago, then wiped my iTouch IN THAT ORDER. NO WARNING OR ANYTHING!!!

So now what Cupertino!?!?!