I had this on my iPhone 4. This phone has never been jailbroken. After downloading, installing, verifying the OS after install, iTunes posted an "error 11" and proceeded to restore the phone to factory defaults.
I make it a habit to sync before I do the update (I really like the "Download Only" option for the new software), so I had a backup that was just taken. I had it restore from that backup and all was well. Since it was backed up, I didn't lose any game progress, just a ton of time I didn't actually have to spare.
This whole ordeal probably took 90 minutes at least, given that restoring a full iPhone via USB isn't all that quick.
I'm doing my iPad 1 now, if I have to restore all 60GB of that it will take a lot longer. 🙂