It seems that we have found a potential problem when updating the firmware from 1.07 which was shipped with the December 2010 release of DVC2.
A solution is to start your interface in "bootloader mode". To do this, the 8 ports on the left need to be bridged. If you do not have a wire or socket capable of doing this, you can use a ball of tin foil. Start the tools application and you will just see the interface and firmware tabs. Write the firmware, remove the ball of foil and reset the interface, then write the firmware again.