I have an unlocked/jailbroken iPhone 3G. My wife tried to update the phone on iTunes and now it is stuck on recovery mode. I have tried pawnage tool but it keeps telling me wrong bundle. I have tried everything and it's like i just can't get it out of this recovery mode. I think some important files may have been erased from my mac and the phone.

Please help I am trying to give this to my daughter for christmas and can't use a vodafone sim without this jailbreak.

Need a lot more information:

1) What version of iOS is the device currently running?
2) What is the baseband on this device?
3) Was the device ever pwned at an LLB level? This is important because if so, you can bypass SHSH requirements.
4) If the device was never pwned at an LLB level, do you have any iOS 4.x SHSH on file?

Let us know. It's very possible that by upgrading the device (especially to 5.0.1) that she has locked the phone again and there may not be an unlock without upgrading the baseband to 06.15 (which is thoroughly not recommended by anyone). If that's the case, you will want to determine the bootloader version of your phone (google, there are hundreds of guides on how to do this, don't use the serial number method, it's not reliable) and if it's the old bootloader, you can use fuzzyband to downgrade the baseband to an unlockable baseband. It's worth mention that less than about 10% of iPhone 3G models at this point have the old bootloader (359.3 opposed to 359.3.2), so don't get your hopes up too high.