My iPhone 3GS gives error 1603 when updating/restoring

I use iphone 3GS...I have been using the ios 4.3.3 all this while. Now, the other day I tried to update to ios 5.0.1 and it gives the itunes error 1603. I have tried every possible suggestion I could get from the forum and apple help site but seems like I can't by pass the error. I finally passed the iphone to the telco, they even failed to update or restore my iphone. Please help me. Tell me what to do!

My 3GS phone is now a brick thanks to itunes!
After being forced to upgrade my iOs because I of an app I decided to upgrade to iOs 5.
The phone is in recovery mode but every time I tried it
Now it is a brick that is going to the pollution pile.
So I am in the Apple Brick club.
Yes I did the typical, Win XP reboot a few times. Changed USB port. Tried different PC.
I have administrator access on my computer.
The phone is out of warranty. Is Apple going to charge me for something that their software did?
I have a copy of the ipsw but have no way of verifying whether the backup file is corrupt.

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