How to restore disabled iphone 4?

A couple of days ago i forgot my password as i changed it the day before, its now disabled and needs to be connected to itunes. I have plugged it in by my USB wire but itunes says it can't connect to my phone until i have entered my password which i can't do! I asked on a few places and realise i must restore it but how? All that comes up is itunes which i can't connect to and i can't get into my phone?

As an Android my first advice would to be get rid of that garbage. But if that's not an option uninstall iTunes and all of it's services. And just reinstall

As I recall

you power off the iPhone
have iTunes running
plug it into the computer
and power it up - maybe holding the power on for a long time
if that does not work Hold the power and main button together

It should go into recovery mode

See also
http://ipod.about.com/od/iphonetroubleshooting/a/Iphone-Recovery-Mode.htm