There is a way to restore your iphone without upgrading the firmware... follow these steps

you would need
1) the original firmware.ipsw
2) the most updated firmware.ipsw

To start -

1) run itunes, and plug in your iphone
2) open itune working directory,
C:\Documents and Settings\*****\Application Data\Apple Computer\iTunes\iPhone Software Updates
3) if you have downloaded the software updates for your iphone, it should appear in this directory
4) put your iphone in recovery mode (power+home 25sec)
5) itunes will need to restore your phone, click restore
6) itunes will ask to check the internet for updates, click Check
SKIP To 8 if you have already downloaded the updated firmware
7) wait for download to finish (donot click restore and update yet!)
HERE the simple trick (if itunes starts to unpack already..then uve done it wrong..click cancel)
8) rename your the original firmware.ipsw to same name as the updated firmware.ipsw
9) copy your renmaed original firmware to the C:\Documents and Settings\*****\Application Data\Apple Computer\iTunes\iPhone Software Updates overwriting the updated firmware
10) click restore and update and it should unpack the original firmware and reflash.


FOR DOWNGRADE
I have done these steps on my 1.0.1 iphone and have semi successfully downgraded from 1.0.1 firmware to 1.0 firmware.. however my modem firmware still says 3.14.8... this may be one of the reason why itune encountered an error right at the end of the downgrade restore..anyone got any fixes for the modem firmware downgrade??

my iphone is not bricked,im running itunes 7.3.0.54..test this at your own risk
Cheers
NR

Why do you wanna downgrade???

i activated my iphone using pqdvd method. and while i was upgrading to the newer firmware iphone hanged.. then i restored it and activated it. But when itunes restored my phone it automatically installed the newer firmware.

The new firmware works great with bypass activation...

... maybe, because the newer firmware may not be unlockable?

__________________
dragon-tmd

Hmm

Didnt think of that F***. But i read somewhere on the forum that dev wiki are gonna try to come out with a permanent solution. of not then i am screwed lol

bump... just FYI

The permanent solution works only if they hack into the baseband encryption.
According to a german magazine, it is a RSA 1024 bit key.
I suppose there may be a way around it, "fooling" the iPhone that the proper SIM card is used but this wouldn't be a permanent solution I'm afraid.

I hope the Dev Team finds a permanent unlock solution, at least for the "current" first batch of iPhones. One thing is for sure: as soon as the unlock is available, the "war" starts. If the unlock really is permanent, Apple will surely find a way to mod their iPhones hardware-wise to make sure that this won't work on newer iPhones. It is my understanding that Apple is obliged by the contract with AT&T to make sure that the iPhone stays exclusively with AT&T for the length of this contract. Many people think that the iPhone is the same stuff as the Apple TV or other Apple products but they're wrong. The iPhone has a very special status because of the AT&T involvement and I'm afraid this doesn't mean anything good for us regarding unlock solutions and further hacks. Right now, Apple and AT&T are probably holding still because it is much cheaper for them to let the Dev Team and others find the "security holes" in the iPhone. Once the unlock is achieved, things will look different I'm afraid. I hope I'm wrong but unfortunately this is the way Apple/AT&T have to protect the desire for the iPhone and to make sure that people, including Europeans and others, need to subscribe to a specific cell phone service provider if they want to use the iPhone. Apple HAS to do something about an unlock solution, simply because otherwise European providers wouldn't be interested in exclusive contracts anymore (which makes sense).

Time will tell, I just hope the Dev Team finds an unlock soon because everybody started to get nervous, including myself.

And where can I find:

1) the original firmware.ipsw ?

You can find it as it shown in the sticky in this forum. That is the original 1.00 firmware, not the newly 1.01 release. Might want to grab it if you want as Im sure Apply wont leave it up there forever.

At the time you wrote this, what you said was not possible. Now it is, using the Turbo SIM method. I was about to buy an iPhone, thinking that I could now use it this way, but could you please elaborate on why you think this solution would not be permanent, at least on the current batch of iPhones? How could Apple make the iPhone understand that in fact it really isn't using an ATT SIM?

Thanks!

If I understood it correct, then the iPhone currently only checks twice whether the SIM is an AT&T one (right after booting or changing the SIM).
This means, that TurboSIM answers the first two requests of the phone with the AT&T IMSI and afterwards it's going to get asleep. All further requests are untouched and go directly to the local provider SIM. This is why your provider has no chance to recognize that you are using a TurboSIM and neither does the iphone.

The only thing that Apple needs to do is implementing a dynamic check of the IMSI from time to time (not only for the first two requests). As TurboSIM has no idea from whom the request is (iPhone or provider), it would not know what to answer.