I'm happy you could get a resolution. When I was searching about I only came across one other 4.1.2>4.2 issue and the bloke ended up returning his, too.

I had some driver troubles as well, but I loaded so much onto my PC and buried myself in dozens of web pages and YouTube videos to fix my problem that, somewhere along the line, everything got set up and I forgot to mention anything about drivers in my previous post. If I remember correctly, there were two Windows 7 drivers; one that gets installed automatically when we connect the N7 while in Windows and another that we should install manually while the N7 is connected and in boot mode (which is what I believe you needed). A lot of typing and no links for reference, sorry - I'll add more information if anyone else has this problem and finds this thread.

Welcome! It's a great little device, isn't it?

This Nexus 7 (32GB) is my first Android device. I bought it here in Japan and was a little let down that it only came with Ice Age, and no Play credit or Transformers. It was already on 4.1.2 and refused to update to 4.2 or 4.2.1 through the update system. Even manually updating it failed! Finally I used the Wugs Nexus Root Tookit 'Flash back to stock' option, chose 4.2 and then the system could update itself to 4.2.1 normally. After that my Nexus 7 has been a joy to use; voice commands and speech to text, information when I need it, quicker-than-PC access to Facebook and email, and the first time I've actually used a non pen and paper To Do list and schedule. I loved installing apps on there from my PC web browser without even having the device connected! I haven't really used it for music or movies, but PDF files for studying programming are good. I had a fear changing from my 2nd Gen iPod Touch that I'd already invested too much in Apple to warrant changing to Android, but so far I haven't had to pay a single Yen on anything other than the device and a case and I've got quite a few games, Japanese learning software, and productivity apps - all.... for.... nothing! 

Thanks everyone.  Let us know how your other Nexus devices work out. I was thinking about a 10, but settled on the 7 due to pricing.

I'll add a bit more about myself for anyone interested. I'm an Australian living in Japan and currently a stay-at-home Daddy living with my 1 year old while my wife slaves away in an office. I recently lost my job but the timing was perfectly matched to my wife's maternity leave ending and we didn't want to put the Little Man into day-care so young, so it worked out. I'll use the next year to study Java and build some qualifications to re-enter the workforce. I'm pretty new to forums (this is the second I've ever joined!) and extremely new to Android and Java. I've had some minor success with C and C++ through my previous work.

It's nice to meet everyone and I hope we can all learn a thing or two from each other!