OK, I know I am an idiot, but let me get this straight. (Also, I am assuming that this will work for iUnlocked phones as well.)
1. Call IPSF and order your license (might as well do this first for speed).
2. Download IPSF 1.6 and install it on my 1.0.2 iUnlock/AnySIMed phone.
2. Virginize the baseband (using roughly the steps found
here), with the bbupdater and the ICE03.14.08_G.eep & ICE03.14.08_G.fls.
3. Reboot the iPhone.
4. iPhone will complain about invalid SIM and will display wrong IMEI. Power down iPhone, remove SIM, power on iPhone.
5. iPhone will boot with no SIM and will show correct IMEI. Phone is locked (due to baseband flash), but activated/jailbroken and can now have IPSF run on it to unlock with a correct baseband. Run IPSF and let it unlock the phone.
6. Go ahead and let iTunes upgrade to 1.1.1. Iphone will now not be activated.
7. Use updated Independence/etc. to jailbreak and activate 1.1.1 iPhone, which is then good to go.