okay i have a solution for those having problems restoring or updating. this means the error codes while restoring or updating. it doesn't matter if you downgrade ur itunes cause it won't work. ure just screwing the registry and installation. get the latest itunes or maybe before that. =) im just summarizing for those people making threads about their encounter with restoring/update error. For You to restore or update ur firmware, regardless of it's state. DFU, the dock connection icon etcetc follow my method, if it doesn't work, tell me so that i can go bang myself in the wall.. 1.Install Itunes or update to Latest Version 2.Have another USB port ready (you need two usb port) for this method though. 3.Restart Your Computer cause its always a rule to follow. 4.Hit Itunes up once your computer finish loading. 5.Do Not Connect Your Ipod Touch to the computer yet. (relax dun get excited) 6.Turn on your ipod touch, you will then see the dock icon or maybe a white screen/black screen doesnt matter. 7.Connect ur ipod touch to the computer and wait for it to get detected and itunes will say This ipod touch needs to be restored etcetcetc. HIT OK. 8.This means you have to Shift+Restore your ipod touch, Locate ur .ipsw (if ure a legit person,it's either in ur C:\Documents and Settings\Application Data\Apple ; C:\Documents and Settings\Application Data\Apple Computer) just look for a file with a .ipsw extension other than that if not just go to the place where you save ur .ipsw (simple enough) if you want to downgrade to 2.2.1 the filename should be iPod2,1_2.2.1_5H11a_Restore, if back to 3.0, iPod2,1_3.0_7A341_Restore both filename is for second generation ipod touch. 9.Then when it's restoring, it would take forever at the Preparing to Restore and this is where you will get the error 1601,1604 etc if you wait too long. 10.While at the Preparing to Restore thingy, wait for a few seconds, until the blue bar goes back to a new start. then you hit CTRL+ALT+DELTE, at ur task manager, end itunes.exe and ipodservice.exe processes. 11.This will close the current restoring task. UNPLUG UR IPOD TOUCH and switch to another usb port than the one ure using. hit Itunes back up and just do the normal hold Shift and Restore process back again. and be a little patient...... and wait this time it will be different cause ur ipod touch will really restore. i found out something though, dunno whether it's a itunes problem or the ipod's firmware. sometimes when you did all 11 steps, i mean after steps 10> ur ipod will still be stuck at the preparing to restore the fix is simple, dun wait too long for the preparing to restore cause you will get that error. when you reach the 11th step and notice that it still take a long time to restore means you just have to switch back to another port other than the current and repeat from step 8 onwards. for a clear cut example; you will notice that after doing the 11 steps, the ipod will turn to a black lighted screen or maybe white. this is the part which you have to wait for awhile until the the blue bar starts back and dun make it go the second time just estimate and judge, ur heart will tell you when. if it still doesn't restore means just repeat step 8 onwards without restarting your computer. if you still don't understand just tagggg. let me if it works for you. im currently on windows xp. so yeah din try it on vista or 7.