I am having the same problem as ratbatblue.
I have an 8gb iphone and I got errors during my install for itunes. Had to uninstall then reinstall itunes. Then during the syncing process, got an 'unknown error' (14) and when i selected more information, it took me to a troubleshooting page. I followed all the steps and still cannot use my phone. It's completely locked up and frozen with an itunes picture on it. So I went to the restore option and it goes through ok until the "verifying iphone restore" stage and it's done. Rebooted, tried another usb connector, switched usb ports, no change.
UPDATE: Uninstalled iTunes, rebooted, closed all background running programs, reinstalled iTunes, and tried the restore again. Error: The iPhone "iPhone" could not be restored. An unknown error occurred (14). This happened half way through the "Restoring iPhone" phase. Got further than before, but same result.