Got a 1.1.2 OTB iPhone at xmas.

Decided as I was already on a T-mobile UK tarrif I would jailbreak and bypass activation and get a stealthsim until software unlock becomes available. Thanks to all the info by you guys on this site this was done easily.

After various calls to T-mobile, I can now terminate the contract so have decided to go down the legit route and take out the o2 iphone contract.

I now need help finding out how to get the phone back to factory setting so that itunes prompts me to activate and take out the contract.
I have searched here for the info and can only find bits and pieces, honestly as it is 02:25 here in UK.

Can I just connect and restore in Itunes to 1.1.2 and then activate from there?

Also, what if I wanted to keep installer for the apps,

First post, Please go easy on me for asking but I did search

Thanks in advance

mitch