IOS5 update: Error occurred while backing up -5000

iPhone 4, attempted update v 4.3.5 to v 5
Windows 7 pro
Get the error "An error occurred while backing up this iPhone (-5000). Would you like to continue to update this iPhone? Continuing will result in the loss of all contents on this iPhone." Continue Cancel.
I hit cancel.
Did iTunes > Edit > Preferences > devices > deleted previous backup (as was suggested in a post) - no change
did computer reboot, - no change
restart iPhone - no change
Suggestions?

I have diabled MSSE.  I have turned off CELLULAR DATA.  I am still getting the same error message :
“Anerror occurred while backing up this iPhone (-5000)” “Continuing will result inthe loss of all contents on this iPhone” "
My iPhone is a 3Gs.  iTunes is 10 .5 .1 . 42.
I'd love to update my iPhone and then my iPad to iOS5.
Any suggestions ?
Thanks.

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