Updeted to 5.01 now can't restore my iPod touch

I updated to the new software and my iPod touch froze. I did a restore but it ony put a few apps back and now all I get is "set up your iPod" Set up as a new iPod or Restore from backup. When I click Restore from backup it goes through the motions but doesn't add any new apps and keeps going back to this option afterwards. Any ideas how I can get all my data and apps back

Restore loop (being prompted to restore again after a restore successfully completes): This issue is typically caused by out-of-date or incorrectly configured third-party security software. Please followTroubleshooting security software issues if USB troubleshooting does not resolve this issue.
Above from:
http://support.apple.com/kb/TS3694
Next try placing the iPod in DFU mode and then restore.
How to put iPod touch / iPhone into DFU mode « Karthik's scribblings

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