This exact same thing just happened to me with my AVIC 8000NEX, exactly as Franky described in his first post. I made it through the update prep and all just fine and when I hit "start" the head unit rebooted and gives the same "software error" message.
I followed the instructions on Pioneers site precisely. I was using a USB stick, on USB port 1, fresh format, FAT32, bluetooth turned off and audio turned off all per Pioneers instructions.