I just received my first Pi the 512mb model. I downloaded 2012-09-18-wheezy-raspbian.zip file, used Win32DiskImager to dump the image to a SD card. The Pi boots up, but after 3.8 seconds goes no further just after the USB/network detection. If I press a key I get into a # shell, without requiring username/password, but if I change for example the /etc/network/interfaces file, the change is lost on a reboot.
I've tried a couple of SD cards, tried with different power (HTC Sensation, and iPhone adaptor) and different cables all with the same result (Voltage between TP1 and TP2 is around 4.85v).
I fired up Arch Linux and that is working fine, am I missing something stupid?