my sgh-i777 running 2.3.4 is saying my firmware is current...ummm i think not. what do i do?

I have a Galaxy S2 SGH-I777 through at&t. It runs on 2.3.4 Gingerbread and when I try to update my phone says that there are no updates available. And when I try to update through Kies, it says my phone doesn't support initialising. how can I fix this? I want 2 root my phone but I wanted 2 update first. and is that smart or should I update after root?