So I have just spent over 6 hours tryna get my newly bought iPhone 3G (from eBay) to work. So a checklist of what I have done till now:

Used blackra1n to get it to activate, it doesn't work.
Used sn0wbreeze to make a custom ipsw, works.
Then trying to restore firmware gives me a 1604 error.
Read about that so my next step was to download iReb latest version which is iREB 4.0.x-4.1-RC2. That did seem to work as the screen went green but then when trying to restore the custom ipsw, it just went into Recovery mode with the itunes logo and the USB cable but nothing really happened. So I tried using the old version of iREB which is iREB V3.1.2, supposdly your iphone screen is meant to go white but nothing happens. It just stays black/DFU mode. I have currently put the stock 3.1.3 firmware back on and I am on the 'No sim card installed' screen. I really don't have a clue what to do anymore, hope you guys can help!

Assuming you have restore stock fw 3.1.3 on the device. Next step:

- use redsn0w 0.9.4
- run it and select firmware 3.1.2 (you need to download that)
- step through the redsn0w process to finish the jailbreak
- install ultrasn0w to unlock it.

iClarified - iPhone - How to Jailbreak Your iPhone 3G on OS 3.1.2, 3.1.3 Using RedSn0w (Windows)