as far as i know, once you upgrade to 1.1.3 your bootloader upgrades too. right now the only way to get a fully functional iphone is if you have a legit at&t/o2 iphone contract sim, then you can just follow the jailbreak and activation guide on the forum. hope this helps
If you updated with itunes, yes, it got wiped out. I did a phone the day before yesterday and I downgraded to 1.02., up to 1.1.1, jailbroke and unlocked it, then soft-upgraded with ibrckr 113 special edition.