Apple TV devices with software version 4.4 and 4.4.1 have an issue with updating software to latest versions. The recommended way to resolve this is go to
Settings > General > Reset > Rest All Settings
This will resport all factory settings there for you will able to update.
Note: If you apply the software update without resetting first, the updater will reset settings for you.
Once you have reset the settings, you can update the software in the usual way. Apply has issued an apology for this inconvenience and hopefully this will be the end of strange update problems for the latest Apple TV. Let us know if you update nad how it works for you.
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