Currently Being ModeratedJun 22, 2012 12:49 AM (in response to ywoodall)
You have done everything correctly. iPhone 4S has Warranty, make Genius appointment and take iPhone to Apple for resolution of the problem.
Regarding setting up as New Device. This can only be done at end of Restore Process, when iTunes prompts you, if you would like to Set Up as New iPhone, you never got to this step because of Restore Failure.