iPhone 3GS stuck at "Connecting to iTunes"

I have restored it with iTunes (I had to use TinyUbrella in order to be able to restore it).
Phone got restored and iTunes tells me this when I connect the phone to the computer: http://i48.tinypic.com/2ugmhau.png

I'm able to change language and country, I can also make emergency calls, I'm stuck here: http://i45.tinypic.com/332m8lf.jpg

Does this mean that the phone's hardware is just fine and it's a software problem?

Thank you