Turns out, if you have changed your system’s host file to point to Cydia’s SHSH caching server (possibly for downgrading purposes), you wont be able to restore/update to iOS 4.3.3. iTunes throws Error 3194:
The iPhone could not be restored. An unknown error occurred (3194).
This is apparently due to a bug in Cydia’s backend which should be fixed soon.
Temporarily, you can fix this by removing Cydia’s SHSH caching server from your host file. This can either done manually by removing Cydia’s IP address from your system’s host file, or by simply using TinyUmbrella, instructions for which are as follows:
Step 2: Switch to “Advanced” tab and uncheck “Set Hosts to Cydia on Exit” option.
Step 3: Click on “Apply Changes”, followed by restarting your PC or Mac.
That’s it! You should now be able to successfully restore or update your iPhone to iOS 4.3.3 firmware.