Yeah having the same problem here....tried setting up as a new phone and lost everything. Luckily i saved a copy of my backup file from a couple of days ago ( found here
Windows Vista and Windows 7: \Users\(username)\AppData\Roaming\Apple Computer\MobileSync\Backup\ ).
However the saved backup file is doing me no good, because I can't access it. Continues to ask for a password that I never set up. Have tried every password I can think of. I am dilligent with passwords, have them all written down everytime I make a new one...This is obsurd. I am thinking about going back to my blackberry.
\I spent 2hrs on the phone last night with apple care and no one has an answer for me! Why did this happen??