Something anyone with the is problem should try, easy and risk-free:
My iPhone powered down last night and while trying to recharge, it kept rebooting. Eventually, I put it into recovery mode, but while trying to restore, and during the 'restoring firmware' through itunes, it would power down and I got an error 29. what worked was something i found online:
first and foremost copy your synced iphone backup from /Library/Application Support/MobileSync/Backup
keep in mind you want to browse the USERNAME and not the OSX directory for the "library" folder.
make sure you copy your backup to your desktop or somewhere safe. here's a copy/past i took from:
http://chimac.net/2010/03/01/error-29-iphone-locked-in-recovery-mode/
Try this solution by Damien. Do not use the 3rd party software iRecovery. It might void your warrenty.
For the Mac Users try this
In the Finder, locate iTunes in the Applications folder and drag it to the Trash.
Go to
/System/Library/Extensions
and locate the file called
AppleMobileDevice.kext and drag it to the Trash.
Go to
/Library/Receipts/
Locate the filecalled
AppleMobileDeviceSupport.pkg and drag it to the Trash.
Go to
/System/Library/LaunchDaemons/
Locate the file called
com.apple.usbmuxd.plist and drag it to the trash
Go to
/System/Library/PrivateFrameworks
and locate the file called
MobileDevice.framework and drag it to the Trash.
Empty Trash and restart the computer. Empty the trash again if needed
Download and install the current version of iTunes.
Now try your restore again.