As you know, you lose the icons to the applications that you had installed prior to the 1.1.3 soft upgrade process.

If you want to keep the them, move your Applications folder to var/root via winandmac's solution to the out of space error (

After the upgrade, you can restore the icons on the springboard by performing the steps in the guide once more after the soft-upgrade. (Of course, you will need the essential BSD and OpenSSH to be installed first in order to gain access to the file system.)