I had the same issue with the last upgrade.
I downloaded 2.1, and after iTunes 8 extracted the software I get a "the phone could not be restored, and unknown error occurred (6).
I restarted the computer, restarted iTunes. My phone has a white screen now. I tried holding down the home button, the power button and both.
Help!
I have a G4 Macbook Pro, iPhone first generation, iTunes 8.
Machead33