New iPhones (that now coming with firmware 1.1.3) can not be downgraded to 1.1.1 at the moment. If you bought iPhone in past which came with firmware 1.1.1 and later you upgraded to 1.1.2 or 1.1.3 can be downgraded again to 1.1.1 but not new iPhones that already came with upgraded firmwares that are not downgrade-able.
So I guess your friend is right for this time. Also check sites www.modmyi.com and check guides sections or try www.iPhone.unlock.no. They are very informative.