Do I have the steps right?:Try using 3.1.2. An error message (error code 1015) will pop up in iTunes after the restore. This is completely normal. Hit Okay and repeat the restore. It is very important that you restore twice. The second restore will result in the same 1015 error. Hit okay after getting the second error message. Now you can activate and jailbreak. Download redsn0w 0.9.2 and open it. Browse for the 3.1.2 ipsw you used to restore and open it. The connect to iTunes logo on the phone will now disappear and the phone will boot. If you get 1600 errors, try iREB.
I was helping a guy troubleshoot this once and he wasn't able to change the file type. Since then I've just recommended downloading it with Firefox because I know that's whats recommended on iClarified's website and I know that will work.C'mon Europa, all he needed to do was change the file type by renaming w/ .ipsw. Downloading firefox was unnecessary.