the reason for that is that you guys are probably using itunes 7.6. It has been reported that somehow this version of itunes breaks the octoprep. The solution? Use itunes 7.5 or some version before .5 (note, i've read that it's difficult to downgrade from 7.6 to .5 on a mac, I suggest to get a 7.5 version and do the whole process in a windows machine)