I tried literally 4 or 5 'guides' that would re-virginize your iPhone using SSH to wirelessly revirginize. All of these guides mentioned to download Terminal vt100 in case you loose WiFi. The problam with Terminal is it is loaded onto your iPhone so you could not cut and paste the commands like you could do if you were using SSH from your computer. Every time I used an SSH method I would loose my WiFi and it would mess up my iPhone and I would have to reformat. As you can imagine the first time this happened I was FREAKED OUT until I realized I could re format and it would be ok. The 4th time tryign an SSH method my iPhone became very hooped. I thought for sure I was out of luck. Nothing worked, iPhone would not get out of yellow triangle mode, iTunes wouldn't even recognize the phone. I was about to give up and I decided to try one more time to reformat. It worked....pheew! Anyways long story short I found this guide http://www.modmyi.com/forums/showthread.php?t=12973
and IT WORKED. It does use the Terminal method instead of SSH so lots of manual typing but man it is worth it. Follow the steps exactly as the guide shows and you will be left with a iPhone running 1.1.1 and a smile on your face. The guide includes all links to the software you will need to complete the re-virginizing process. Good luck with it and I will keep an eye on this thread in case you run into problems. By the way I am a bank manager not a computer guy so it looks a little freaky but if I can do it...........
I've tried 4 times already without success. I suggest you be patient, read LOTS of discussions and forums before going upgrade-happy and be prepared for the inevitable if you do decide to upgrade.
You've probably read on the iPhone websites- Apple is making the firmware harder & harder to hack. My iPhone stayed locked for 2 days even after repeatedly downgrading from 1.1.1 to 1.0.2. nothing seems to work anymore. Out of frustration, I used Independence and Cyberduck at the same time, just clicking randomly between them. Independence finally unlocked my iPhone yesterday. Sheer luck.
My advice? Unless you have a contract with AT&T, DO NOT TOUCH YOUR iPhone ONCE YOU UNLOCK IT. Leave it alone. As long as you can make calls, surf the web, use the ipod and watch movies, you'll be fine.