Another casualty here. Same story as most. Synched with iTunes, advised that software update is available (3.1.3 I think) and that the update fixed the error with battery indicator, so said "OK" and updated..... thanks apple.
Anyway now getting error 29 when attempt to restore - have tried all the steps suggested by jjlee
http://discussions.apple.com/thread.jspa?threadID=2325175&tstart=0&start=15
Still not working, so last resort I downloaded the irecovery and following the suggestions recommended by mrangelo.
All good up to step 6, but irecover doesnt seem to be able to detect iphone(after a number of attempts).
Going to try again tonight....
BTW: for Vista users, I had a lot of problems in cmd prompt following this step
4. goto the folder by doing this: type c: -> press enter -> cd\ir -> you're in the folder
A shortcut is to navigate on yr desktop directly to the folder and hold "Shift" while right clicking on the folder and select the "Open Command Prompt Here"