I have posted the following on iphone-dev, just wanted more people to hear it, and tinker with it, and give feedback.
My view on 1.1.1 jailbreak is as such, we have something that apple did not want us to have, we can downgrade to 1.0.2, and we have all the files of 1.1.1.
What do we need? Jailbreak. Write access, or even exec, as governed by fstab, which is on /dev/disk0s1, which is clobbered bits and pieces by the update, hence everything is overwritten. WHAT IF. We downgrade from 1.1.1->1.0.2, we'd still have baseband of 1.1.1, and remember, we have the files of 1.1.1 from /dev/disk0s1, so what we could do is, cd /dev/disk0s1 (in 1.0.2, on ssh), rm -rf *, cp <1.1.1 files> /dev/disk0s1 , edit fstab to give the proper access, reboot. BAM. 1.1.1 phone with 1.1.1 baseband, with edited FSTAB to give jailbreak access.
Some of the devs have promised to tinker with the idea, but some are afraid of brickage should anything go wrong with the kernel.
For myself I'm just waiting for my 1.1.1 phone to arrive and I'd try. for now, post your feedbacks (constructive), and for those with real stones, how about an experiment and post some results? Lets help the devs out and do what we can do on our own :) Thanks.