Just to warn other people; I've tried updating my iPhone 4S when I had a VMware Workstation instance with Win8 open on the background, it failed updating. My iPhone got stuck in recovery mode; I tried everything! Kept getting error 1604, tried switching usb-hubs, nothing worked! Until I closed VMWare! This solved everything 
I hope someone will find this if they have the same issue.
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Precaution: Restoring/updating iPhone with VMware Workstation with Win8 open
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