I got the same thing, and my phone got put into recovery mode. I just unplugged it and replugged it, it asked me to restore so that's what I did. It's currently restoring my backup now onto iOS 5.
For me, I hit the restore process, get a spot on apple's servers, it goes through the restore, and at the very end it fails and gives me error 3004 :|
My is now been plunged into recovery mode. Cant do anything with it, itunes now not finding my iphone. Anyone?
Error 3004: If the steps listed in Error 3000-3999 do not resolve the issue, and you are using a Mac, you may be able to resolve an error 3004 by quitting iTunes and using the following command at the command line: dscacheutil -flushcache