I had exactly the same problems with both my iPad and iPhone 4! In the case of the iPad I had to restore the device and that was a pain but at least I was able to restore and update it. However, with the iPhone 4 it got into a 'failed to restore' loop that I could not get out of. I followed the advice in this article
http://support.apple.com/kb/TS1275 and tried the various measures suggested including creating a new user account on my iMac and trying to restore in the 'clean' copy of iTunes in that new account - but that failed as well! In the end I managed to restore the iPhone by downloading iTunes onto a Medion PC Netbook I have and restoring it on that PC. I was then able to reconnect to the iMac and restore from a previous backup of the device. All is now well but I think Apple should be ashamed that it took a WINDOWS PC to get my Apple iMac out of trouble. As a matter of interest I have been using Macs for over 10 years and have had no trouble with previous Apple software updates until the 3 most recent - OS 10.6.5, iLife 11 and iOS 4.2.1 and all 3 have given endless problems that I should not have had to sort out. It is time to "get a grip" Mr Jobs!
Message was edited by: dave_a
Message was edited by: dave_a