iphone froze during update from itunes

[Yodaman]

I was updating my iphone from itunes and all of the sudden my phone froze. on the screen it had an apple with a bar under it. i did a soft reset and now on the screen it shows a usb plug and the itunes logo. My itunes advised me to restore my phone to its factory settings but i will lose everything!

 

[Yodaman]

Recovery mode

itunes tells me my phone is in recovery mode! do i have to restore it back to factory settings

 

[BigRedOne]

Mine iphone just froze up as I was down loading their latest upgrade . What did you guys wind up doing? I really hate to lose my data, but I guess I may have to. This really blows.....