iPhone 4 updated and now wants me to restore or setup as new
I went to the Apple Store the next morning, and the person went into the "Set up as new iPhone" option and found a "Skip" option that I had not seen. This bypassed the whole set up process.

All of my data except some passwords and bluetooth pairings seem to have been preserved.

Suggestion: There should be a fourth option, something like "Use existing data". The three options presented, along with the failure to go further, certainly made it look as if I had lost all of my data. Why would one choose "Set up as new iPhone" if one had data they wanted preserved?