I'm syncing... it's looks like the worst Mac nightmare I've gone through may finally be over.... best of luck everyone else. I hope your nightmare ends soon too!
(By the way, total upgrade time --- closing in on six hours!)
Please describe in detail your steps regarding upgrading. i.e. Did you wait for the time out error message or did you frequently click between music and iPhone.
I wish I had some advice. Just a lot of patience and constant switching from music to iPhone, then saying OK when the Error -4 appeared. Suddenly it just finally connected. I never would have noticed had my iPhone screen not changed (I had pulled up some other work and kept going back to it in between error message appearances).
I would wait a while after you click on your iPhone. I finally got it to sync by quitting iTunes and starting it back up. You have to give it a chance to find the music store though. Then I ran into a problem where it wouldn't sync because it couldn't find a missing file. I just quit iTunes and (maybe by luck) got it to re-connect with iTunes. Now it has synced my Ringtones and is working on my songs right now. Good luck to everyone else. I've been trying for about 8 hours.