Now you’ll be prompted to enter your Apple ID (aka iTunes account) information. This is the same account that you set up either when you started buying things from the iTunes Store or when you activated your iPhone originally. No need to set up a new account.
You’ll also be asked to register your phone – fill out the required information to do so. After that, iTunes will offer you a free trial of Apple’s Mobile Me service. Take it up on that offer – or skip it, your choice - and continue.