When upgrading to my iPhone 1.0 Edge to the new iPhone 2.0 software using my Dell laptop, the restore would would always freeze at the end of the Restoring iPhone Software dialog box below. Apple has a KB article on how to fix this, but none of those options ever worked for me. The last time this occurred, I had to bring my iPhone to Apple and they gave me a new phone.
Here was the only option that worked for me today.
1. I synched my iPhone on my Dell. This is my main PC since I use Microsoft Outlook and all of my iTunes songs etc. on on this computer.
2. I synched my iPhone on a MacBook and downloaded the iPhone 2.0 Software but did not intall it.
3. I installed the iPhone 2.0 Software or firmware update on my Dell Laptop and started the upgrade process. It backed up my iPhone and started the upgrade process. When the screen appeared to lock (it was at the above screen for almost a hour) I disconnected the iPhone from the USB cable.
3. I connected my iPhone which displayed the Connect to iTunes screen to my MacBook and followed the screen prompts to install the iPhone 2.0 software.
4. The Apple Activation servers were down at the time so I had to click [OK] and Music and the iPhone until it finally gave me the activation screen.
5. When the activation and restore was completed, my iPhone was activated but my iPhone contacts, calendar and settings were missing. I connected my iPhone to my Dell laptop and followed the screen prompts to restore the iPhone software.
It worked! I am now running my iPhone Edge on the new iPhone 2.0 software! It's very cool!