If you’ve accidentally upgraded to 3.1 on your iPhone 2G, all is not lost. I have been receiving a lot of requests for a solution.
Apple’s firmware releases have not had any detrimental baseband effects on iPhone 2G’s. So it really is just a matter of time before a jailbreak comes around or a downgrade is possible.
If you are part of the few who have upgraded and haven’t been able to use their iPhone and you have a 2G, you are in luck.
Downgrade my iPhone 2G from Firmware 3.1 to 3.0.1
1. Download iTunes 8.2 (MAC/WIN)
2. Shift Click + Restore to Firmware 3.0.1
3. Download/Use Redsn0w (MAC/WIN)
Note: Some people have had success restoring to an already Jailbroken/Unlocked custom firmware of 3.0.1 and then running Redsn0w.
Nothing has really changed since Apple updated firmware 3.0 to 3.0.1 except for an SMS exploit patch. If you have a jailbroken iPhone, read Updating to Firmware 3.0.1 (Why you should wait) before proceeding. Therefore, nothing really changes with the jailbreaking and unlocking process.

The quickest way is to use redsn0w. The tutorial is up to date for the most part. The only difference you will notice is that even after you update to 3.0.1 through iTunes, you will still select firmware 3.0 in redsn0w to jailbreak and subsequently unlock your iPhone.
3 Easy Steps (A Quick Reference)
1. Update to 3.0.1 through iTunes
2. Select firmware 3.0 in redsn0w to Jailbreak and Unlock
3. Enjoy
Unlock/Jailbreak your iPhone in Under Two Minutes
Once again the iPhone dev-team make unlocking your iPhone, running firmware 3.0, much easier. If you thought QuickPWN was fast, wait until you meet redsn0w.
Follow the steps below to unlock (iPhone 2G only) and jailbreak your iPhone 2G, 3G, and 3Gs.
Steps:
1. Download redsn0w (mac/win)
2. Upgrade your iPhone to Firmware 3.0 through iTunes
3. Plug in your iPhone and Run redsn0w
Additional Download Files [if needed]:
Firmware 3.0
Bootloader Files 3.9 and 4.6
Notes:
1. Do not install Icy since there is a compatibility issue with Cydia.
2. To Unlock your iPhone 3G and 3Gs use ultrasn0w
“And for those wondering, yes the 3.0 OS is jailbreakable on all devices.”
~ Dev-Team

The Dev-Team has already jailbroken the latest iteration of iPhone firmware before it’s official release. Only iPhone 3G users will need to wait for a custom firmware package to update their iPhones without updating their baseband and losing unlock capabilities.
The iPhone 3G Unlock has Arrived
Sitting in a freezing New York sublet still recovering from an even colder New Year’s Eve filled with long cab rides, empty promises and unattainable resolutions, I find myself reminiscing about the ball drop and people’s lips counting down to yellowsn0w, the first impactful statement of the New Year.
Your iPhone 3G is no longer locked to AT&T or it’s respective international counterparts, so ring in the new year with your carrier of choice. Details below.
As Always Thanks DevTeam!
—————————————————————————————-
Exerpt from the DevTeam:
Don’t eat yellowsn0w!
Hello all,
We wish you a very happy, healthy, and hopeful 2009!
We have released the 0.9.1 beta yellowsn0w 3G unlock application.
RELEASE INFO
Cydia source: http://apt9.yellowsn0w.com/
Installer repo: http://i.yellowsn0w.com/
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