I, like many others, kept getting "An internal error occurred" when trying to upgrade my iPhone 4 to iOS 5. Foolishly, I continued to hit the Update button and try again. It eventually led to my iPhone being in recovery mode. I am now unable to restore the phone due to the ongoing issues with Apple's servers and unable to use the phone because the failed upgrade process placed the phone in recovery mode.
After two hours of trying and getting error messages at various points in the process, I was able to get my iPhone restored and on iOS 5. I knew better than to try the update on the first day when the servers would be slammed but did not expect it would drop my phone into recovery mode where it would be unusable.