Followed this guide to the tee: http://iclarified.com/entry/index.php?enid=1573

The only thing I checked was Cydia since I'm on a authorized network, YouTube fix and Activate are not checked.

On step 15, where you restore the custom firmware (after building it and pwning iTunes) I get a "Unexpected error 6" and it would just throw me out of the restoration process and my iPhone would be stuck on the Apple logo. I have to shut it off and turn it on again to get DFU.

Restoring a genuine IPSW is fine, I only have problem with the built IPSW.

Forgot to include a few things:

iPhone 3G 16GB White
Windows Vista SP1 (no problems with prior 1st generation iPhone)
iTunes 7.7 (duh)

Custom firmware builds out fine. With Cydia file size is 223 MB, which is strange considering the genuine firmware is 225 MB without Cydia.

Are you certain that you are pwning the correct firmware?
For 3G you need the iPhone1,2_2.0_5A347_Restore.ipsw firmware (225Mb).
The iPhone1,1_2.0_5A347_Restore.ipsw firmware is smaller (218Mb).

You can still try a prebuild custom firmware from a torrent site...

Edit: I created a custom firmware for the 3G right now (with the mac pwnage tool) ... with only cydia checked the size of the ipsw is 238.2Mb

I'm sure I used the correct firmware as I restored using it once I figured out it won't work.

I will try to use Pwnage on OS X to make a new image.

u have to put iphone in DFU mode to install custom firmware