Updated iphone 3GS to IOS 5.01 and now I cannot restore or activate phone

Hi,
Today I updated my stock iphone 3gs to IOS 5.01 from 4.3.5. All went well until I noticed that my apps had not be restored. I attempted to restore my phone in iTunes but now all I get is "There is a problem with your iphone" message appear in iTunes and on my device.
What can I do to restore the phone to working condition? Any suggestions would be greatly appreciated.
Kind regards
Mark Sheehan

Better yet, just got off hold with Apple Tier 2 Tech - their Verification Server is down. Give it time for a fix.

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