This error 3194 occurs on any iPhone, iPad when trying to restore from higher firmware version to lower version. Apple started signing or authenticating the version of iOS being installed on the iPod or iPhone through iTunes. To stop people from jailbreaking the device or using older versions of iOS, Apple no more allows installing older versions of OS. Below is more detailed and technical explanation via iphoneheat
When you try to restore an older firmware on the devices listed below, Apple won’t let you do that. Once you ‘upgrade’ they don’t let you downgrade. The way they stop you is basically by a simple response that iTunes receives when you try to restore the firmware of your choosing. See, the firmware is now signed for the below devices. It is signed with a unique id (ECID) that only your device has. Apple takes the firmware version files and combines them with your ECID and generates a hash that ONLY APPLE can generate. iTunes packages up this valuable information and sends it to your device. Your device checks the information and verifies the signature (making sure it really came from Apple because it CANNOT be forged as the encryption is very high). If the signature matches then the restore process can continue. If the signature does not match, the device raises an error and the restore process stops. Apple stops signing older firmwares once a new one is out.
TinyUmbrella is a useful app that can now save iOS 4 SHSH regardless of whether your iDevice [ iPhone, iPad, Touch ] is jailbroken. You can save SHSH blobs for iOS 4 even if you’re on OS 3.1.3 or older. TinyUmbrella saves the file locally AND sends the request to Cydia so Cydia will have the SHSH as well. If Cydia’s TSS server is down, your only option will be to use TinyUmbrella for restoring through iTunes. Download from iPhoneheat.
iREB is a tool for Windows that will put your device [ iPhone, iPad, Touch ] into a pwned state so that you can upload custom firmware to it. Download from ih8sn0w.com and watch this YouTube video http://www.youtube.com/watch?v=LUC1t11JDMA
Or Simple, follow my earlier posts to jailbreak your device before Apple stops signing iOS 4.3.2 – Download latest Jailbreak iOS firmware 4.3.2–iPhone, iPad, Touch and Simple Clean Instructions to Jailbreak iOS 4.3.2 on all iPhone, iPad