If you have not already, download version 3.0(59) from Avaya and make sure it's the full CD you download, not just the binary files.
Install that Admin apps as normal.
Now unless you have reset your IP Office by mistake, Manager should not be sending a bin file to it. Chances are it's trying to send the firmware out to you DS phones rather than your IP Office, so make sure the 54xx bin files are in your Manager folder. Or, it may be failing to send hold music or something like that. In Manager, click View and select TFTP Log. This will show you what file is being requested.
If you have reset your unit, then do the following.
Make sure you have the IP address on you Manager PC set to something like 192.168.42.5 (IP Office uses 42.1)
Edit the Bootp entry for your IP Office in Manager...
MAC = the MAC address of your unit (you can get this from the TFTP log in Manager)
IP Adress = 192.168.42.1
File name = ip401ng.bin
Reboot the Small Office Edition with the LAN connected directly to your Manager PC (to avoid DHCP kicking in). This bin file should then upload.
Let me know how you get on.