What's with connect to iTunes on my iPhone

Was updating to latest iTunes 9.0.3 and whilst updating my iPhone was connected to my PC, all of a sudden the connect to iTunes appeared on my iPhone after the update had completed. Disconnected iPhone from PC and connect to iTunes logo still on screen, tried to switch off iPhone and switch on and same connect to iTunes logo appears on screen. When trying to connect to my PC it doesn't recognize the iPhone at all, have removed iTunes from PC and downloaded again and still same thing and no error code. I cant do anything with my iPhone now.

Did we ever find a solution to this? I am also stuck on the 'Connect to iTunes' screen on my iPhone (which I brought secondhand) - a 3G 8MB. I have restored several times, but when this is done I get back to the 'Connect to iTunes' screen.
I have also tried installing the Black Rain unlock software (was worried that when I plugged iPhone into iTunes initially it downloaded new software for the iPhone that may have locked it). However this doesn't work. Have also tried installing the Pwnage software and this also doesn't seem to help.
One other piece of info - The original problem seemed to start when I plugged phone into iTunes and it said my SIM card is not supported locally (this still shows in iTunes when I connect iPhone to PC). I have phoned the network service provider who was confirmed the SIM card should / is active etc. etc.
Any help would be massively appreciated. There are not many Apple Stores in SA for support

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