In some regions, OTA is not available, so you have to use Kies.
Sometimes, Samsung’s Kies server may be too busy, or the server does not have good connections to some regions. So, you may still face some problems even if you have very good internet connection. In case of such problem happens, you can try to reboot your phone, and try to connect to Kies again and check update again.
Not sure about the pop-up play feature for UAE ICS 4.0.4 update, as it was just released last week and I haven’t heard any reports (complaints) on this.