I just tried a couple of ways - unfortunately I still haven't been able to upgrade.
First I opened up Outlook (connected via RPC/HTTPS) then DM & connected the handheld. I checked for upgrades, and it didn't find any.
Thinking that it might somehow want a more 'solid' connection, I closed out DM & Outlook. I then connected via VPN, opened Outlook with a traditional TCP/IP connection, then launched DM. It doesn't find anything available.
Would this ability be dependant upon downloading & installing the new OS somewhere for the BES to be able to distribute it? If so, I know that we haven't installed anything on the BES since MR1. I'm contemplating opening an 'emergency downtime' ticket to upgrade the BES to MR2 if that will help!