There are 100 different guides and tutorials out there none of which answer my question. I bought IPSF but used iunlock.pxl because it came out first & I have no patience !!! After reading posts claiming the pxl method messed with the baseband and after finding out that IPSF was compatible with 1.1.1, I went ahead and flashed the baseband with the original firmware using the following method by Andreas Louca


Go to Settings - General - AutoLock and set it to never on the iPhone
Open Putty.exe (or Terminal) and type in the IP of your iPhone (found in the WiFi list when you click the arrow on the right of your WiFi name), select SSH and connect. (you might get a message saying to accept the key of the iPhone just say yes)
Username: root
Password: dottie
If you managed to connect to the iPhone then your doing well. Leave Putty open as we will need it later.

Run WinSCP (or Cyberduck) (after you have installed it of course) and connect to the IP of the iPhone like before, but select SCP as the type of connection. Username and password are the same as above.
Browse to /usr/bin/ on the iPhone
Upload bbupdater and ICE03.14.08_G.fls which are the 2 files from
the ********** link.
close WinSCP
Go back to Putty now. type the following commands one after the other
once each command has completed:

cd /usr/bin
chmod +x *
launchctl unload /System/Library/LaunchDaemons/com.apple.CommCenter.plist
./bbupdater -f ICE03.14.08_G.fls
launchctl load /System/Library/LaunchDaemons/com.apple.CommCenter.plist
reboot
Now the iPhone will reboot and you will still have the BAD IMEI when it reboots, take out the SIM card and reboot it again by holding down the power button for 3 seconds and slide to power off. Turn it back on and you will have a good IMEI but the phone is locked.
Turn on WiFi and run SimFree to unlock.
Turn off the phone and installed your SIM card. Enjoy your unlocked phone with a good IMEI and update resistant.


and re un-locked with my IPSF license! Now my question is can I upgrade now to 1.1.1 & just jailbreak and be good or not??? Do I need to re-virginize the phone or not ? I have read numerous posts none of which are specific to my set of circumstances

Regards

if you have unlocked with IPSF you can just upgarde jailbreak and activate just follow any guide, it should all be smooth and will stay unlocked

stuck at activation see here!
http://www.hackint0sh.org/forum/showthread.php?t=12552