I have here my friend's ipod with the firmware 1.1.4, I've just jailbroken it 2 days ago, and then thought why don't I upgrade it for him to the newer firmware 2.1, I found a way to upgrade, but can I upgrade it right away or do I need to restore to the original 1.1.4 firmware, and then upgrade?
You can upgrade directly (then re-jailbreak as upgrading erases the changes made); but for precautions, you may want to upgrade to 2.0 then 2.1 (though there shouldn't be much to worry about other than it can't upgrade). No need to restore, just upgrade and re-jailbreak.