Major iPhone Bug

[From Darcy Boese, in St. Catharines, Ontario, Canada] This is a big one, folks. Here are the known symptoms:
- your iPhone reports that there is no music available
- every 3rd-party application crashes immediately after showing the splash screen
- the iPhone and iTunes both show that all the space is still being used
This has happened to my phone too. I've gone through a full restore of my phone several times, eating up hours of my time each time. "Extremely annoying" is an understatement. In my case, the only thing I'd uploaded onto my phone that I still had access to for an entire weekend was my single custom ringtone.
My own complaint to Apple's support has as of yet not been answered. There are reports that Steve jobs himself sent out an email that this issue will be fixed in the next upgrade in September.
According to multiple threads on Apple's discussion boards http://discussions.apple.com/thread.jspa?threadID=1644897&tstart=0 the cause is still unknown, but there is much conjecture. There seems to be some corruption in the phone's DRM, which manages both the music and the apps. Apparently downgrading iTunes from 7.7.1 to 7.7.0 helps many people avoid the problem, but unfortunately reports are that doing so only reduces the likelihood of the mystery trigger.
If this bug affects you too, the discussion thread above gives much advice. I have downgraded my iTunes to 7.7.0, and I'm avoiding using the on-phone AppStore as much as possible, relying instead on the iTunes store and Syncing for my needs. So far, so good, but no promises.
Other than time, I've lost all my SMS messages, my entered Contacts, a couple of songs for Tap Tap Revenge that are no longer available for download, and a couple of free apps that are also no longer available for download (in particular: iSaber, Vexed, and one that gave me ALL the local movie showtimes, and not just the ones listed at fandango.com).