Did you check the Processes tab in the Task Manager, for a hung firefox.exe process?

Yes, nothing shown in task manager other than the update wizard.

Do a clean (re)install:

• Download a fresh Firefox copy and save the file to the desktop.
• http://www.mozilla.com/firefox/all.html
• Uninstall your current Firefox version and remove the Firefox program folder before installing that copy of the Firefox installer.
• Don't remove personal data if you uninstall the current version.
• It is important to delete the Firefox program folder to remove all the files and make sure that there are no problems with files that were leftover after uninstalling.

Your bookmarks and other profile data are stored elsewhere (not in the Firefox program folder) and won't be affected by a reinstall, but make sure that you do not select to remove personal data if you uninstall Firefox.

You may also have to remove the files in the updates and updates\0 folder:

C:\Documents and Settings\<user>\Local Settings\Application Data\Mozilla\Firefox\Mozilla Firefox\updates
(%USERPROFILE%\Local Settings\Application Data\Mozilla\Firefox\Mozilla Firefox\updates)

See:

• http://kb.mozillazine.org/Software_Update (Software Update not working properly)

To recap: tried unsuccessfully to update firefox so downloaded latest version, install wizard got as far as saying that firefox "must be closed to proceed" task manager did not show firefox listed under applications or processes, tried to uninstall firefox using windows add/remove programs same message "firefox must be closed to proceed with the uninstall" tried restarting computer, made no difference. Fired up computer today and tried reload again - went ahead with no problem???? and I am now happily on the latest version. Many thanks to those who offered help, happy browsing.

After deinstalling Firefox 12.0, Firefox 13.0 could be installed. Too bad that Mozilla is getting to the point where even an upgrade to the next version gets complicated :-(