My SGH-i777 running 2.3.4 is saying my firmware is current, but I don't believe it is I have a Galaxy S2 SGH-I777 through AT&amp;T. It runs on 2.3.4 Gingerbread and when I try to update my phone says that there are no updates available.

When I try to update through Kies, it says my phone doesn't support initialising. How can I fix this? I want to root my phone but I wanted to update first. Is that smart or should I update after root?
Your phone has the latest update for its generation. It will receive no more updates for the rest of the time you use it.

In order to "update" your phone, you would have to root it, and then flash a custom rom with an update available for it.