IPhone has been syncing for 2 hrs, now iTunes doesn't recognize my phone and is "restoring iPhone from backup"

It's been a while since I've synced with my computer (yes, I'm still on iOS 4.0). Tonight I finally synced all my music, apps, purchases, etc. Tried to import all photos into iPhoto (tried 3 times) and about a third of the way through my 3,000 files it quit on me and didn't import a single thing.
After I did a manual backup of the phone, iTunes said it would download the file to update my iOS to 5.0. Took almost an hour to get the update file... and now iTunes no longer sees my iPhone as "Erica's iPhone," it's just a generic iPhone symbol and it says "Set up your iPhone" / "This computer has previously been synced with an iPhone or other device" / "Restore from backup" which started automatically. Am I about to lose everything on my phone?!?!?!
Help!

Hi galvarenga21,
If you are having issues with an iPhone that won't start up past the grey Apple screen, you may find the following article helpful:
iOS: Not responding or does not turn on
http://support.apple.com/kb/ts3281
Regards,
- Brenden

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