iphone will not restore Error 21

Here is a little background to this problem. I had an original iPhone that the Wi-Fi quit working on this past week. The phone was 2 1/2 months out of warranty and Apple would not, or could not do anything to help me other than sell me a new 3G. I just purchased the 3G tonight (16g black) and they activated it at the store for me. I made a phone call on the way home and all is good.

I get home and was going to check to make sure the Wi-Fi on the phone worked when all of the sudden the screen goes to the Apple logo and then starts freaking out. A lot of text flies across the screen saying something about a PANIC and Darwin Kernel. I read online all sorts of issues about this, before I finally come across how to start the phone in recovery mode. I finally get it started in recovery mode and hook it up to my PowerBook G4. I click RESTORE and it gives me this message:

The iPhone "iPhone" could not be restored. An unknown error ocurred (21).

I literally had this phone for 1 hour! My original iPhone was a Christmas gift from my wife and it bothered me that it was no longer working, but then to have this happen immediately is sad. Can anyone help? Does anyone have any information about this error or how I can get my phone restored, or should I just take what appears to be a lemon back to the Apple Store?