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So Im wondering if I should send this phone back
Mine does the same thing, even after doing the "Clear Data" thing.
Rooted?
Negative, all stock except I did update to JH7 Firmware, it is after this firmware update that this started happening for me personally. I'm not entirely worried though, or sweating it, since I can still use Kies to update.

This just worked for me. It's downloading an update right now.If this is your only "issue," not until you've tried the following.
A search of the forum disclosed this:
From the Home screen, press the Menu button and select Settings.
- Select Application, then Manage Applications
- Press the Menu button, then Filter, then select Running.
- Scroll down the list and select Device management.
- Under the Storage section, press the Clear data button.
- Power your phone off, then back on.
This just worked for me. It's downloading an update right now.
