While flashing the Gingerbread update for Galaxy Ace (taken from samfirmware.com ) I encountered an interesting problem with my ODIN being stuck at “Setting Up Connection” message.
The problem I figured out later was a simple case of my phone being in the wrong mode. For updating you must be in the “Downloading” mode, In this mode the phone flashes a single line message on the screen – “Downloading…”
To get to this mode reset your phone(take the battery out, also take out your sim card and micro sd card). Hold Home, Volume Down and power buttons and then connect to the system.
VERY IMPORTANT: If you hold the Volume Up or both Volume buttons you will end up in other modes (like the ram dump mode).
Once in the more updating is just a few minutes affair 🙂