Stitching your SHSH blobs to a firmware file makes it so that you don't have to do anything tricky to point iTunes to Cydia's server. The SHSH blobs are inserted directly into the firmware meaning that you can downgrade without having to edit your hosts file or use the TSS server. This is extremely helpful if you have been having issues downgrading to the last firmware that supports an untethered jailbreak: iOS 4.3.3. The best part about doing this is that your device does not need to be put into pwned DFU mode when you are restoring.
CURRENTLY ONLY WORKS WITH IPOD WHILE REDSN0W DEVELOPERS FIX IPHONE BASEBAND ISSUE
You will need:
1. Redsn0w 0.9.9b1 Mac
2. Tinyumbrella Mac
Here is a mini guide on saving your SHSH blobs to your hard disk with Tinyumbrella:
The first thing you want to do is make sure that you have your SHSH blobs saved to your hard disk. To do this you can use Tinyumbrella. Open it up and click on the advanced tab, then where it shows the directory of where your SHSH blobs will be saved, change the directory to something that you will remember such as a folder in your documents folder.
Just below that, look at the options that are checked in the advanced settings in Tinyumbrella. Make sure, "Save all available SHSH" is checked and, "Request SHSH from Cydia" is checked. If you don't have Request SHSH from Cydia checked, Tinyumbrella will only save the SHSH's that Apple still signs (4.3.5, 5b).
Plug in your device and select it from the list on the left. Now up at the top right, click, "Save SHSH." Your blobs for the device you selected will be saved to the folder that you specified.
Here is how you actually stitch the blobs to your firmware:
Open up Redsn0w 0.9.9b1, click on Extras>SHSH Blobs>Stitch. A new menu will come up asking for the IPSW file and the SHSH file you want to stitch to it. Your window should look like this:
For this tutorial I moved my iPod's 4.3.3 firmware and my 4.3.3 SSH blob to my desktop for easy reference.
At last, we are ready to to do some gene splicing! Go back to the redsn0w Window and click the IPSW button and select the IPSW you want to downgrade to (I will be using 4.3.3 for iPod touch 4G), and then click the local button and select the SHSH you want to stitch to it (I will be using the 4.3.3 SHSH blobs for my iPod). Once you do that it will begin the process:
Finally, the custom made IPSW will be placed in the same folder as your original IPSW file. You can use this in iTunes to downgrade to the firmware you desire at your convenience. Simply go into iTunes (Shift+Restore/Windows, Option+Restore/Mac) and select this custom firmware to downgrade.
Make sure your hosts file is cleared of any customizations either by deleting those lines or by commenting them out. The hosts file should be pointing at Apple when you perform the restore.