Installing 4.0.2 results in error and phone in recovery/restore mode?

Plugged my phone in to update to 4.0.2 and iTunes downloads the update. It attempts to install it, errors out, and then when I do it again, it says the iphone has to be restored. What the heck? Also, prior to this update, whenever I have connected the phone to my computer, it syncs properly, but gives me an error message despite that. I usually just click through it and ignore it, has been working fine.
Should I get my device swapped out for a new piece? (Also the home button sticks sometimes)

Happened to me a week ago. Apple gave me a new phone.
Phil

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