Preparing iphone software for restore

itunes has been showing "preparing iphone software for restore" for almost 2 hours. the blue and white bar is running and iphone has the apple and little white circle is going around and around.
should i just wait or do I need to unplug phone and start over. something tells me not to unplug...
anyone have any advice?

My iPhone has been buggy since upgrading to firmware 2.0 and when the new version of iTunes (7.7) came out last night I thought it would be a good idea to do a full restore. I have restored my iPhone in the past and everything worked flawlessly, even if it might not have been speedy.
Here is what happened to me:
I chose to restore my iPhone and it did the same thing you mentioned as it sat there with the status bar running saying it was "preparing iPhone software for restore". It NEVER stopped after quite a while.
so...
I reset the iPhone and disconnected it and restarted iTunes. I reconnected my iPhone and it recognized it as being in the safety mode (forgot term) and then gave me the option to restore from backup. I selected restore from backup and it then made it past the preparing software but got hung up on actually backing up the iPhone. We are talking hours. I then did a reset on the iPhone and repeated this process and said F it and went to bed.
When I woke up the phone was restored and working and had all of my apps on it but no music, photos, etc. I was ok with that as I needed to leave for work. it had even restored an alarm I had set as it was going off when I entered the room.
My issue is that I don't feel that the phone got a full and clean restore as it had to be removed from the process MULTIPLE times due to the process hanging for hours. Anyone who has restored knows it is not normally this messy or timely of a process.
Anyone who can advise us on what to do would be very, very helpful. I am considering completely reinstalling iTunes on my mac and starting over but don't want to have to do ALL of that (as it would include reimporting all music, photos, redownloading and reinstalling all apps, etc).
I love my Apple products and they are usually good to me but the firmware 2.0 and now this iTunes 7.7 have been some of the buggiest software I have ever used from Apple.
Please help and thank you in advance.

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