4.0 Update Rendered my iPod Useless

16 month old unit, always worked flawlessly.

Here's a breakdown of what lead up to the problem:

1) Updated to 4.0 software

2) Sorted apps into folders (primary reason I wanted to update)

3) For a day or two, some apps worked okay, some would freeze up and then take me to the apple screen of death (white apple on black background)

4) Contacted Apple customer service. They said to do a restore.

5) Did restore, but in the middle of restoring it just 'stopped' and never re-started

6) Now, my Ipod is frozen at the screen of death. When I attempt to restart holding power/home buttons, it takes me right back to the same screen and NEVER does anything else.

Please help if you can. I don't want to be stuck with a $300 paperweight.