Today the users are upgrading their devices to iOS 5 while getting error “3200 error” some of them have been trying their devices to restarting more than 7 times it had been resolved for them who had tried to activate the devices some of them used to upgrade by manually installing the iOS 5 from their local machine it seem working well for them. And Users having begun reporting the issue on Apple’s official forum which are not letting them to activate their devices between nothing wrong or getting Apple Servers down as users are left with a 3200 error code, and unable to finish the activation. This isn’t a good situation by any means leaving users, in some cases, with almost bricked devices until Apple can get things back up to speed. GDGT has noted how to bypass this error by installing iOS 5 manually. Simply hold down option + click “Check for update” in iTunes, and navigate to the IPSW file as if you had tried to install by manually may it can work for you by locally activating your devices, Also looking through the support forums you’ll find reports of OS X 10.7.2 and iCloud issues probably related to Apple’s overcrowded servers.
Source: GDGT (commenter)