First off, I cannot see anyway to even begin to restore an iPhone without an internet connection.
Next, although iOS 5.0 has been downloaded to this computer, iTunes is insisting on downloading 5.0.1 before doing a restore.
Can Apple really be so sure iOS 5.0.1 introduces no new bugs and that simply reloading what used to work fine will be worse every time than a brand new iOS?
Apple Self Service doesn't work in Thailand(as the network operators are said to supply support), so I am guessing that means no remote Apple Service to somehow override iTunes.
Anyway, on to the real frustrations...
It seems to be impossible to start or restart the download of iOS 5.0.1 without the iPhone connected with the SIM card installed(I removed the SIM and put it in an old Nokia so I at least have a phone number that works) - and now I need to remove the SIM from the working phone for the sole purpose of starting and restarting the iOS download.
As this internet connection so slow/drops out every hour or so and the download is predicted to last 2-3 hours AND astonishingly the iOS download RESTARTS FROM SCRATCH every time it has a network issue.
..the iOS download may never finish.
The inability for iTunes to recover from a network issue and continue downloading a 790mb file is hopeless.
Given that slow/unreliable internet and distance from any Apple Store go hand in hand - I think this is a show stopper for country folk - I could not possibly recommend an iPhone to anyone outside a solid broadband area.