An error occurred while restoring my iPhone after I updated to the newer version of iOS4, help!?

Indy Asked: An error occurred while restoring my iPhone after I updated to the newer version of iOS4, help!?

Ok I've been searching for hours and days on this issue. Seems like a lot of people are having the same problems. A few days ago I updated my iPhone 3G to the new version. After I updated it, it was doing this restore. And then this message came up later that the restore couldn't be completed or whatever. There were options of being able to Canel, Continue Restore, or Delete Backup. A few times I pressed Continue Restore, but afterwards each time this message would come up, "An error has occurred on the iPhone (my name) (-34). Also my main issue is I think that the update took up a lot of space so now my iTunes is 0.81GB over capacity. What gives? I only have sync only checked songs and videos selected and ringtones (which doesn't take up that much space). I don't even have 800 songs yet. I know that there is SO much more room, but something must be taking up the space. Someone please help me with this. I know it sounds stupid but I really want my music back on my phone because I seriously cannot do my math homework or any homework without it. Thank you!