Restore an iPhone backup.

About encrypted backups in iTunes - Apple Support - http://support.apple.com/HT203790

You have to delete it. Encryption is there to stop anybody without the password from getting access to private data.

You do get unlimited guesses. To speed up the process of guessing uncheck Encrypt Backup and you will be prompted immediately. And it's probably a password you have used elsewhere if you are like most people.

Here is a list I gleaned from a long thread a while ago:

You need to single-click above.

I am sorry you cannot do anything about it. It can't be used. Try to recollect. Number of attempts or multiple incorrect entries do not matter here.