Problem recovering new iPhone 4, Stuck on "Preparing iphone for restore", then giving an error message

I recently bought an iPhone 4, and it worked just fine, until I tried to sync it with iTunes. Whenever I would try to sync it, it would stall somewhere in the process, and then an error message would come up eventually. It would say something along the lines of "Process timed out, Internal Harware error" or somthing like that, there were several error messages.
So then I tried to restore the phone. I did it through iTunes, and eventually the process stalled on the "Preparing iPhone for restore" part, and then it would give me an error message (4013). My phone is stuck on the connect to itunes screen. When I do connect it to iTunes it says that the phone is in recorvery mode and that and needs to be restored. So again, I try to restore it and it gets stalled in the "Preparing iPhone for restore" part. I have also recieved the 2005 error code. I have tried to fix it by unplugging all other USB's, using a different USB port, disabling firewalls ect.. I have the newest version of iTunes, and my phone is running 7.0.3 (Can't update now that the restore is necessary, and I couldn't update anyways because the same problem I had syncing it occured when I tried to update.) I have Windows XP.

Error 1 is a baseband error. If you have Warranty or AppleCare Coverage take iPhone to Apple for resolution of this problem. If no coverage then search the Web for Error 1. Users have reported some success with this Error 1.

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