What next? Should I upgrade or downgrade to install Installer.app and start hacking this beast. I'd like custom tones, NES, GBA emulator, the whole 9 yards. Lemme know guys, thanks!
Use appsnapp (www.jailbreakme.com from iphone) to jailbreak and install the installer.app, from there you can install ok2prep from installer and your iphone is now ready to be upgraded to 1.1.2 and then you can re-jailbreak. Pretty easy, there is a detailed guide on the site, search for 1.1.2 jailbreak.