I've been searching for this problem bit haven't found anything so I'm posting it in case someone else runs into this.

I've got a 1st Gen iPhone which I upgraded to 2.0 from 1.1.3 using the PwnageTool. Everything went fine except the time was an hour early. I tried to change the time for the clock, but when I go into Settings -> General -> Date & Time the settings app crashes and returns to the Springboard. When I upgraded to 2.0 I restored from my backup which included my timezone which is CST but the phone was in Pacific Time.

I haven't found how to solve the crashing of "date & time" but I've found a workaround.

SSH into root of phone
rm /var/db/timezone/localtime
ls /usr/share/zoneinfo/

get the code for your timezone and remember it

ln -s /usr/share/zoneinfo/(code) /var/db/timezone/localtime

Now you just need to restart the phone and it will come up with the correct time.

Date & Time crashes then iPhone hasn't support for your timezone (all_cities_adj.plist lacks your timezone city & time entries). At least this was my case.

Thanks, I added my country to

/System/Library/PrivateFrameworks/AppSupport.framework/all_cities_adj.plist

and now it's working.