My iphone is 1.1.1 unlocked, but has problems due to lots programs installed.

How can I get to restore it back to 1.1.1, then jailbreak it?

I tried HOLD+SHIFT + Click on "RESTORE" in iphone, a windows pop up, I picked the 1.1.1 FW, and then NOTHING happen....

My itune is

I thought thats where the restore process will start....

Somebody please help..