Cannot upgrade Samsung gt-i5800 firmware from 2.1

Hi I cannot upgrade Samsung gt-i5800 firmware from 2.1 using kies, it tells me that the phone requires 3000 mb (or 3gb) but it doesn't even have this as internal memory as far as i know! Has anyone else had this problem? Also the storage space is always getting full and won't save on my external sd card - will the update change that? Any help would be great as I don't know what I'm doing and I'm sick of a phone that can only have 5 extra apps or so on top of the ones it comes with :(