IPhone 3G update/restore failure

I don't know if I've got a 3G or a 3GS, don't know what the difference is..
Okay, so what have I been doing?
I wanted to update my old out of date iPhone, so I started by transferring everything over, and then I made a back up.
I downloaded the update, and then started to apply it. iTunes decided to make another backup for me (lengthy process)... I don't strictly recall, but I think that after the backup finished, it went into a 'restore' mode. I checked it periodically and there was the apple logo, with a progress bar underneath. iTunes wasn't showing any activity on the phone, but the bar was going. Well, it made it to what I thought was the end, and it chilled there for a good 45minutes, and nothing happened.
Starting searching around, and what not, because at this point, iTunes was frozen, and my phone wasn't going anywhere. I've tried restarting the phone several times, and it just sits at the apple logo screen. When I plug it into the computer, the progress bar re-appears, and it starts doing something. iTunes has it recognized at this point, and I can click on it, and it says that it is now completely up to date, but my phone is doing something, and I don't know what it's doing. After a phone restart, letting it go for a while, it gets to the end, and just sits there. I'm going to let it sit for an hour or so, but some help in the meantime would be great.
I don't know how to fix or where to go from this point. Kind of at a standstill.
~Thanks,
in advance.
~~Edit
I guess patience truly is a virtue. It finally went through and completed whatever it was doing. Thanks.

You can take videos with a 3GS.
iPhone and iPod touch: Unable to update or restore

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It was on 4.3.3 and was getting a little slow so I decided to do an update + restore to 4.3.5.
After the restore and update, iTunes gave me the "the SIM card inserted into this phone does not appear to be supported" error... so I can't get past the emergency call screen.
I tried restoring in DFU and with diff comps PLUS diff Rogers SIM cards and no dice.
Also tried restoring with/without SIM card in during restore.
Any ideas on how this has happened and how I can fix it?
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I have been trying to download the latest OS for my iPhone using iTunes for the last 2 days.
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It always fails with error -3259
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I have updated iTunes, tried with and without firewall and antivirus, forwarded all ports in the router to my workstation........
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LOG:
Microsoft Windows XP Professional Service Pack 3 (Build 2600)
Dell Inc. OptiPlex GX620
iTunes 10.2.1.1
QuickTime 7.6.9
FairPlay 1.11.16
Apple Application Support 1.5
iPod Updater Library 10.0d2
CD Driver 2.2.0.1
CD Driver DLL 2.1.1.1
Apple Mobile Device 3.4.0.25
Apple Mobile Device Driver 1.55.0.0
Bonjour 2.0.4.0 (214.3)
Gracenote SDK 1.8.2.457
Gracenote MusicID 1.8.2.89
Gracenote Submit 1.8.2.123
Gracenote DSP 1.8.2.34
iTunes Serial Number 0013A6800Fxxxxxx
Current user is an administrator.
The current local date and time is 2011-03-18 08:55:27.
iTunes is not running in safe mode.
WebKit accelerated compositing is enabled.
HDCP is not supported.
Core Media is not supported. (16005)
Video Display Information
Intel(R) 82945G Express Chipset Family
Intel(R) 82945G Express Chipset Family
** External Plug-ins Information **
No external plug-ins installed.
iPodService 10.2.1.1 is currently running.
iTunesHelper 10.2.1.1 is currently running.
Apple Mobile Device service 3.3.0.0 is currently running.
** Network Connectivity Tests **
Network Adapter Information
Adapter Name: {F75B9EE5-D985-4722-B187-64D34Bxxxxxx}
Description: Broadcom NetXtreme 57xx Gigabit Controller - Packet Scheduler Miniport
IP Address: 10.0.1.25
Subnet Mask: 255.255.255.0
Default Gateway: 10.0.1.3
DHCP Enabled: No
DHCP Server: 255.255.255.255
Lease Obtained: Wed Dec 31 19:00:00 1969
Lease Expires: Wed Dec 31 19:00:00 1969
DNS Servers: 209.235.160.2
209.235.161.2
4.2.2.2
4.2.2.4
Active Connection: LAN Connection
Connected: Yes
Online: Yes
Using Modem: No
Using LAN: Yes
Using Proxy: No
SSL 3.0 Support: Enabled
TLS 1.0 Support: Enabled
Firewall Information
Windows Firewall is off.
Connection attempt to Apple web site was successful.
Connection attempt to browsing iTunes Store was successful.
Connection attempt to purchasing from iTunes Store was successful.
Connection attempt to iPhone activation server was successful.
Connection attempt to firmware update server was unsuccessful.
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