I am trying to upgrade to 1.1.3 using the following method on a macbook:

So in a nutshell I am using the 1.1.3 package maker for a mac.
When I open terminal and drag and drop the file in, the program runs but says that my phone is not jailbroken.

Is that because I jailbroke and unlocked all from safari on the iphone?
Is that not a true jailbreak, or am I skipping a step.

FYI I have tried this with and without itunes open, and with ituneshelper running and killed.