Okay -- not normally this slow on the uptake. My iphone is 1.02 firmware. It's jailbroken and I've got a ton of progs and sources. I also have some themes and stuff.. but, I'd be fine reinstalling or rejailbreaking or whatever to get the benefit of louder volume.
Having said that -- I know "unlocked" phones are bricking with the upgrade.. are jailbroken phones affected the same way? Or, will my phone simply upgrade and restore back to the way it would look new?
If you follow the guide in the Wiki, and have never applied any of the apps like iUnlock.app or anySIM.app or iPSF (which may work) you will be fine (not get bricked).
You will have to reinstall all your apps, but you won't lose your themese or photos or contacts or any settings really, assuming you follow instructions well.
This is because you don't restore (as you supposed in your post) when you upgrade, you just update. Your /var/root/Library and /var/root/Media files are intact (which is where most documents and settings are kept). This is actually the basis of the jailbreak, the always accessible Media directory is used as a shortcut to the root of the phone.
Okay .. updated to 1.1.1 hope the volume is greatly improved. Phone is not a brick.. working fine..but, it absolutely restored to phone to factory settings. Ringtones are gone -- contacts are there.. but, everything else is different. Will have to figure out how to get my rings on there again.