Hi,

when I downloaded the 1.0.2 firmware from apple for my 1.1.1 phone it comes down as a folder.

It's needed as a folder first, but then I'm supposed to make it back into a .ipsw file. I added the extension be ctrl clicking the folder, and in the "show info" menu I added the extension. but it's still as a folder, and I can't select it in itunes to do the upgrade...

What should I do!?

Are you using Safari (mac) to download? It will unzip itself.
Use Firefox and it will be a *.ipsw file that you can use.

OK, thanks, I will try this...

So now after I chose the Firmware tab in independence, the iphone turned off it self, but asks me to connect to itunes when put back on, can I now do the firmware downgrade?

Follow the instructions closely in the Independence help file, will not go wrong that way.