Having evangelised the PlayStation 3's in-game and trophies-bringing XMB firmware 2.40 it's a real shame to have to advise that it isn't the godsend we (I?) hoped for. While yes, many (myself included) have happily downloaded and installed the update - Sony has had to pull it because a fair number of people's consoles were getting killed by the update.
More worryingly there seems to be to pattern or definite explanation for what is causing these problems. 80GB, 60GB, 40GB and 20GB version of the PS3 all seems equally likely (or unlikely) to be broken by this update. Supposedly some users on the PlayStation forums have found that removing their hard drives and reformatting them helps - although that would mean losing your saved games, data and, in fact, anything else on the drive. The implication being that the update is causing data on peoples' hard drives to corrupt somehow.
In fairness to Sony, it sounds like this problem will be (fairly) easily fixable and isn't something that could have been tested for. And at least it doesn't break consoles like the Xbox 360s Red Ring of Death!
Hopefully a fixed version of the firmware will be pushed out soon, preventing these problems from proliferating further.