I was on 1.1.4 unlocked with t-mobile. But the only difference i see for you is that you'd have to grab a non-activated ipsw from willydavidk.
I restored to a clean 2.1, then tried a couple of the methods on willydavidk's list, the one that worked was method 5, white DFU mode. Just follow it step by step and you shouldn't have any problems.

Did you do method 1 first, then followed each method until you got to method 5 that worked or did you do straight to method 5? Also, you were unlocked with t-mobile, did you use a pwnage tool (quick, win, etc) to unlock your phone. I guess what I am saying is that I dont want to do anything in depth if I dont have to since others seem to be getting so many errors, if I can just shift-restore on my current 1.1.4 to 2.1 using CFW then I will try it, but if not, I dont want to lose everything I have on my phone and be stuck with a regular 2.1 phone while I am waiting for winpwn 3.0 to be released. I want to be at least 85% sure before I begin doing anything!!

Update: I called a buddy of mine with a MacBook Pro, used the guide for the Pwnage 2.1 tool at the begging of this thread, and I HAD NOT ONE PROBLEM!!! The entire process took about 20-30mins (it took longer to download the needed files than anything!!). So to all my fellow Windows users, find someone with a Mac!! I will be buying my own now sometime in the very near future. And FYI, I was on a 2G, 1.1.4 JB w/ AT&T. I did not even update my phone to 2.1 before beginning!! Thanks to everyone who replied to my many messages!!

i updated my 2g iphone with quickpwn 2.1 & itunes 8 and everything was good then all of the sudden i was in cydia downloading something that required restart springboard...it waited for a while then all of a sudden it went to the pineapple screen..when i hard reset my phone by pressing and holding home+power..it stays on the pineapple screen.. what should i do...im using tmobile so its unlock and i change startup images??

I got an Iphone-3G, 8GB that is activated by Turbo-Sim. It works fine as a phone ... but the Itune does not recognize the sim card ... it requires that an authorized AT&T card be inserted.... and though shown on the list of the Itune as Iphone.... no synchronization, no nothing.... i would appreciate if anybody can help suggesting what should I do on my email: sgaawan@darcairo.com

I have a jailbroken 1.1.4 2G phone. I read the guide on going from 1.1.4 to 2.0.2 but was wondering if there was a way to go to 2.1 in one conversion. Can I just let iTunes upgrade me to 2.1 then use Pawnage to jailbreak ? I'm on OSX.

Thanks in Advance

Yes you can just go to 2.1. Since you are on OSX you can build a custom 2.1 firmware. Windows Users still have to go to 2.0.2 custom built by winpwn 2.5 then they have to use itunes to upgrade to 2.1 then use Quickpwn. (of course thats if you want to unlock,activate, and jailbreak)
Since you have a mac, pwnage tool will build 2.1 and do it right there.
You didnt however state if you were on a captive carrier. If you just want a jailbreak, QuickPwn 2.1 will do that for you. So you dont have to build a custom ipsw

Muggz5 ,
I'm on AT&T jailbroken but not unlocked and just looking to jailbreak.
Thanks for the reply.

this is so much easier! Love it! ) THANK YOU

I just used PwnageTool_2.1. for the 1st GEN Iphone didnt have to do anything else or use any other programs, just open the program connect the phone and let it run, it did it all by itself! very simple.

yes!

I need help can u help me?

Ok so I got to jailbreak my iPhone and once i get to the restoring part error 2001 comes up and I can't restore the iPhone with the jailbroken firmware because the iPhone won't show up unless I reboot it again and then its not in DFU anymore...please help me out.