Solution: Restore and Update button greyed out in iTunes after upgrade to iOS 5.0.1

I recently ran into a problem after upgrading an iPhone to iOS 5.0.1 where the Update and Restore buttons on iTunes are greyed out (not allowing you to click on either). I believe this problem is not related to the iOS version, but rather the network service provider. Usually if there are any setting changes to the network providers' network, you will receive a notice in iTunes when you plug in your phone the first time after upgrading, that tells you an update to the carrier settings is available and offers to upgrade it for you. If you do not upgrade, you may not be able to receive a signal and your iPhone/iPad may show "No Service" on the status bar.

Especially with iOS 5.x where you can activate your device without connecting to iTunes, this issue may happen more easily. Or if you are using an iPhone which is locked to another network other than the one on your SIM card, this could happen also. So what happens now that you have No Service on your iDevice and you are unable to even Update or Restore?

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First Solution
The First and easiest thing to try is to replace your microsim card with another one. Usually this will cause iTunes to search for a new update for the carrier of this other microsim. If you see that your service has been restored, then you are successful.

If this fails and you still don't see the iTunes notifying you of Updated Network Carrier Settings, then try the next solution.

Second Solution
This solution will require you to use the Redsn0w jailbreak tool. Now, you may be reluctant to jailbreak your device, but rest assure, the choice is all yours. We are only using this tool to deactivate your iDevice. Go to Dev-Team's blog [LINK] and download the latest Redsn0w iteration. Run the Redsn0w and then click on Extras -> Select IPSW. At this point you should point to the IPSW firmware version your iDevice is currently on.

After you have done this, go back to the first screen and click Jailbreak. In the next screen, deselect everything and select deactivate. Then click on Next and just follow the instructions on following screens to get your iDevice deactivated. Once you have gone through all that, you should now be able to plug in your iDevice to your iTunes machine and see that you need to update the carrier settings and hopefully be able to receive your mobile signals.

That's how I rectified my problem and I hope it will help you too.