The 8.1 upgrade process is inexplicably defeated by really simple things (that have been reported since 8.1 Preview).
- If you added a second drive to your system (e.g., you installed an SSD as the new boot drive), the upgrade will fail if the second (original) drive is not disconnected. In the same way, any external drive must be disconnected.
- It's necessary to run msconfig and disable all non-Microsoft services, reboot, then initiate the upgrade (or re-initiate the upgrade, since you've already seen it fail by this point).
These two points seem to resolve many instances of failed upgrade.