Seriously. This is a major problem with the iPhone 3G and its software. I had to endure 2 restores already in the first two weeks I had it. Luckily it backs everything up on iTunes so at least i did not lose anything other than my time. (Hmph ... my time ... each restore took well over an hour!)
I have been traveling a lot lately and I had not had a chance to synch my iPhone. It was working great the past 2 weeks since the last restore. I decided to synch it back up with my computer tonight to get some new music and movies and it offered to install the new iPhone 2.0.1 OS. I said sure, go for it. It said great ... now I'll proceed to screw up your iPhone! Seriously ... it started to install the new OS update and it never completed (at least I don;t think it did). After about an hour of waiting for it to reboot, I decided to manually reboot it (holding both buttons down for 6 seconds or so). It restarted and told me that all I could do was restore. Sigh.
Don't get me wrong, I love my iPhone 3G. Its been great so far except for the short lived battery life. I can deal with a few hiccups, after all I used to use Windows Mobile a lot so I know about hiccups :-) But Windows Mobile NEVER EVER died to the point of needing an OS reinstall. Not once in 3 years of using it. IPhone has done it 3 times in 4 weeks on me.
Apple ... it's time to fix these issues and quickly.