Once, when upgrading my Touch, it locked up completely and required several attempts to start a full reset/restore, so I can commiserate with the sense of how disturbing it can be until everything gets working again. I hope it doesn't happen again, but try thinking about it this way... Obviously something got a bit messed up, or you ran into a heretofore undiscovered bug, but the device did what it's supposed to if things get badly fouled up and did a restore. It would have been a lot bigger issue if it failed to restore and start working again. As long as it restored and you can upgrade again think of it as a glitch. Apparently, it got messed up enough that it could not restart and/or files got trashed and it had to restore.
I don't mean this as a defense, but as long as things are properly restored it's an inconvenience not a catastrophic loss. While I'd rather have a device that never messes up, one that fixes itself when it does isn't too bad a compromise. OTOH, it can be a pain setting everything up again. Good luck.
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