As far as the iPhone not being seen in iTunes, the link below will provide some assistance.
http://support.apple.com/kb/TS1495
As far as why does the iPhone need to be restored. If the iPhone is not connected are you able to use it normally?
If so have you tried connecting the iPhone into the different USB ports other then the one you are currently using?
Tips
*Do not connect iPhone to USB Hub, Keyboard that has USB Ports, or USB Cable extender if possible
*Disconnect any un-needed USB Devices such as Printers, Scanners, Cameras, Etc. That are not needed at the current time
*Try to connect and use back USB ports if you have a Desktop