OK. My mistake was thinking that the custom IPSW was a jailbreak also. I thought once I used itunes to shift/click restore, I would be able to use phone, restore my backup, and then install ultrasnow via cydia.
I also was confused by this:
"This procedure will cause you to upgrade your baseband potentially ruining your chances for an unlock. Please wait until we have posted a tutorial on how to update to iOS 5 using a custom ipsw if you need an unlock."
Then this tutorial linked to the instructions on how to create the custom IPSW. At the bottom of that tutorial was a link back to the tutorial with the above statement to not use that tutorial.
But I have no one to blame but myself. In my defense, (hmmm, can stupidity be defended?) it was partly information overload, I read a few too many guides, and didn't think about the fact that a guide that is 6 months old is old indeed when technology is concerned.
At any rate, all the help and patience is greatly appreciated!