Can I sync from my iPhone into iTunes to restore library?

I've had to reinstall my Windows XP laptop that I use for my iPhone and iTunes library. Unfortunately, I lost everything, but I was hoping to restore my iTunes library from my iPhone (seems logical that I should be able to do so). However, I've only succeeded in restoring my purchased music and my applications. My machine is authorized. For some reason, when I try to sync my music, I get a message that indicates the iTunes instance will overlay the iPhone (just the opposite of what I'm trying to accomplish). This should be easy, but I'm not seeing how to do this in the HELP guide.

Can anyone help me?

Thank you!