The file you downloaded from iClarified was a .IPSW -- the problem is that overzealous browsers (Chrome / Safari) see this as a .ZIP file and extract it automatically after downloading. Stop your browser from extracting it and save it as just the .IPSW, then you can point to it to restore when your phone is in Pwned DFU mode. Make sure you're using Pwned DFU mode, DFU mode alone (as with recovery/restore mode) will NOT suffice to restore a no_BB firmware.

My story is as follows:
- I got an Iphone 3gs 8GB locked to AT&T. It was on 5.0.1 but I forgot the firmware
- I gave it to someone for unlocking, thereafter it got stuck in recovery mode, with USB/Itunes logo on screen
- I followed the instructions on this forum: redsn0w 0.9.10b1/Extras/CustomIPSW/Pwned DFU/Itunes/Custom
- Now it has stuck on configurer mode. It gives configuraiton option: I select English / Oman / Allow Location Services, then it goes to a screen where Itunes/USB logo is there and on the left top it shows Searching..... Then after a while it will restart and do the same
Any help?

Progress:
- I just used redsn0w 0.9.10b5 and installed cydia. Now it shows springboard, however I observed the following:
- On top left, it shows Searching
- OS 5.0.1 (9A405)
- Firmware is showing blank
- WIfi is showing NO WIFI
- Model MC640LL
I used custom IPhone2,1_5.0.1_9A405
One more thing. It restarts again and again, and does not remain on springboard
Any help out there???

Any one please help. i have an iphone 3gs it wont finnish ristoring, as soon as the ristore bar is just pass the apple logo i get an error "The iPhone "iphone" could not be restored. An unknown error occurred (1)." after that the phone reboots int recovery mode> i have tried everything to get it out of the recovery mode with no success. guys pls help