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Just add a '+' to the end of any bit.ly link and it will tell you where the link goes and how many people have clicked it. http://bit.ly/aCDBwh+

So update.zip is from the Google site. Why is Google not promoting this or why did they release this?

It's the zip file your Nexus One will download automatically in the background during low bandwidth times of day (to avoid strain on the cell network). It doesn't do so right away, as they also want to stagger the rollout. If you do the manual download and recovery method, you're just doing what the update will do eventually.

I'm getting a 404 Not Found on the zip file link.