How to Restore your iPhone or iPod to factory settings
This video tutorial shows you how to restore your iPhone or iPod to factory settings or to restore it to a specified firmware update. First you are shown how to enter the DFU mode or device firmware update mode on your device. Download the specific firmware you wish to restore to and make sure you already have iTunes installed as well. Open iTunes and connect your device to the computer via USB by putting it off and holding the home button while plugging it in. Click OK on the dialog that pops up and hit the restore button while holding the shift button. Choose the firmware version you want to restore to and click open to extract software and wait for the preparation to restore to complete. Click OK on the dialog that pops up, eject your device, and exit iTunes.