Iphone stuck in recovery mode?

I got a iPhone 3gs today and it seems to be stuck in a recovery mode. Everything i turn the phone on it goes to a screen with the iTunes logo and a usb cable. When I pluged my iphone into my computer it says device not recognized and along in there it says device has malfunctioned. I'm using a aftermarkit cable so that my be my whole problem. Anyways I have itunes 10.6.3.25 on my computer. Can someone help me I paid like a 100 dollars for this iPhone on ebay and I was thinking on making it work with Straightalk

I'm really really sorry but you will need to send it in to Apple. OR. THERE's ANOTHER OPTION. Jailbreak it, which is legal and easy, with Redsn0w. I'm sorry you have to do this, I had to do it with mine, but do it, install Cydia, and this will unlock it. It will ask you to do some steps on the screen, but here's a better tutorial:
I really hope I helped and you can fix it! I only RECENTLY had this problem with my iPhone 3G! And yes, jailbreaking is now legal as of 2011. You don't have to do third-party things though, just keep Cydi and try not to restore it. Hope I helped!

If itunes won't recognize then try a program called tiny umbrella, it has a exit recovery button. Mabye it is your cord. If nothing works then you just got scammed on ebay.