I have the same problem.
Check this post
http://daveaubin.getpaidfrom.us/2008/04/01/how-to-fix-a-continuously-rebooting-iphone-jailbreak/
Recover Mode:
1. Hold down the top right button and the round bottom middle button for about 10 seconds while in the charge jack that you had last synched from that’s connected toyour pc.
2. The phone will go dark. Release the top button ONLY. While the iPhone is still plugged in. This is the key to getting itunes to recognise the iPhone in recover mode!
3. Notice the iPhone now shows up in itunes and itunes detected your iPhone is in recovery mode with this popup:
iPhone Recovery Mode
4. Click OK and then begin the reinstall your firmware.