New iPhone 3g...will not let me install FREE Applications. Help please!

I just got the iPhone 3g and every time I go into the Apps Store on my phone and attempt to install a free apllication, I am prompted to put in my Apple ID and Password. I always put them in correctly (I just reset my password thinking that was the problem) but I always get the following message:
"Authorization failed. Please connect to iTunes."
Connecting to iTunes gets me nowhere and I am so stuck. Can someone please advise? Thank you so much in advance!
-Tony

The only advice I can give is:
1. Make sure you are logged into iTunes on your computer before you sync. Your accuont info only gets synced over on sync when you are logged into iTunes on your computer.
2. If that doesn't work, give a reboot a try.
A reset/reboot is:
Go to Home Screen
Press and Hold Home Button
Keep holding and press and hold Lock Button
Keep holding Both
You will see Slide to Turn Off (Don't let go to slide, just keep holding)
The phone will turn off (in time, but screen will look like it has some white lines)
Keep Holding
When you see the Apple Logo, you can let go.
Turning off via the Slide to Turn off while good and fine to turn off, is more like the Sleep Mode on a computer. Thus any locked up issues in memory remain when you turn back on. A reboot as described is like doing a real Turn off and Turn On on a computer.
You may also wish to read this tread about reboots and odd application behavior.
http://discussions.apple.com/message.jspa?messageID=5851978#5851978

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