Upgrading to iOS 4 can take a long time, especially if you’re upgrading an iPhone 3G. If you’ve made it through the upgrade process, but data restore process was interrupted for some reason, you aren’t out of luck because iTunes can pick up where it left off.
iTunes crashes and accidentally disconnecting the iPhone or iPod touch Dock cable are common reasons for incomplete data restoration, and clicking Stop in the iTunes restoration progress dialog will kill the process, too.
Resuming an interrupted data restoration.
To pick up where you left off, just reconnect your iPhone or iPod touch to your computer. iTunes should display a dialog asking if you want to resume the data restoration. Click Continue Restore.
This trick works great if your iPhone or iPod touch completed the iOS upgrade process before being interrupted. If something went wrong during the OS upgrade, you may have to start over by clicking Restore under iTune’s Summary tab.