My grandma wanted music on her iPhone 4, so I connected it to a PC. I chose the new iPhone option, but it looks like it is restoring it from my dad's phone. Is there any way to get it back to setting it up like a new phone?
You can restore the device by cancelling the restore of the backup, then selecting Restore iPhone in iTunes. This will reset it to the original state and allow you to set it up without the backup.