The iPhone “iPhone” could not be restored. An unknown error occurred (1600 – 1601 – 1602 – 1603 – 1604)
There is an easy and quick fix for this. The downside is that it is Windows only (Mac version is in the work), and that it only works for iPhone 2G, iPhone 3G, iTouch 1G and iTouch 2G. In other words, no iPhone 3GS and iPod Touch 3G support.
iREB (iTunes Restore Error Bypasser) is a neat little tool that will help you fix these errors.
Step 1: Download iREB from here.
Step 2: Launch iTunes and put your iPhone in DFU mode (hold power and home button together for 10 seconds; release the power button and keep holding the home button until iTunes tells you it has detected an iPhone in recovery mode.
Step 3: Once iTunes has detected your iPhone in recovery mode, close iTunes and launch iREB.
Step 4: Select your device and wait for the screen to go red or white.
Step 5: Launch iTunes and hold the SHIFT key while clicking on restore. A window will open. From there just browse for the custom firmware you want to restore to.
You should be good to go. iTunes should restore your iPhone to the desired firmware without giving you any error.