I was updating from Minecraft 1.5.0 and the MC launcher read about 2% downloading lwjgl.jar, I recieved the following error:

"Fatal error occurred (4): No buffer space available (maximum connections reached?): recv failed

Retrieving minecraft.jar 27% @ 198.31 KB/sec"

I went into the windows registry editor and shortened the TCP time wait delay, (how long tcp waits to free unused connections.) Then I increased the max # of tcp connections, but the problem still exists.

I also purged the .Minecraft directory and the problem still occurred.