The system restore worked and got my system into a bootable state.

After the system restore, I had to reinstall iTunes because itunes no longer worked. (Since the prior system save point had happened mid-install of iTunes 9.2)

After the iTunes install, ALL MY APPS IN THE APP STORE ARE GONE. So now I have a bricked phone where I can't restore the phone's backup, and my only choice is to go forward with iOS4. But now all my apps are gone, including a couple of expensive ones.

Arg.