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If you’ve previously unlocked your iPhone, or you are considering doing it in the future, you should probably hold off updating your phone for the moment. Apple’s recent 1.1.1 firmware update has been bricking hacked phones, and though there’s a method for downgrading back to 1.0.2, the telephony portion of the device will remain broken (well.. until someone resolves this, hopefully soon).

Hackintosh has this quick summary:

1) If you have unlocked your phone at all, regardless of whether it’s to use another sim / carrier or even just for fun and you’re still using the AT&T sim, DO NOT UPDATE to 1.1.1 unless you want to render your phone useless. It will not work afterwards as things stand at the moment.

2) If you haven’t unlocked your phone and you haven’t jailbroken it and want to update to 1.1.1, you will not be able to jailbreak it afterwards as things stand. Until someone does Jailbreak 1.1.1, this will not change.

3) If you are still using Firmware 1.0.2, you can still synch with iTunes. If iTunes suggests you update your iPhone, just say no. In Preferences, you can turn off the setting to look for updates automatically so iTunes won’t even bother asking.

4) Your 1.0.2 Phone will not just brick itself. Apple can’t beam an auto bricker to your phone….You have to help them by trying to update to 1.1.1 after you’ve hacked it. Apple warned you, there’s countless tales of woe on these forums that should serve as a warning….JUST DON”T DO IT!!!

5) If you haven’t hacked your phone in anyway whatsoever and you want a cute Starbucks logo to appear everytime you’re near one (as well as the other updates) then you should be fine, as long as you’re aware of point 2.

As I mentioned, if you’ve already performed the update, you can restore the previous os firmware. None of the phone features will work, but at least you’ll have your applications and WiFi connectivity back. Methods for restoring the phone’s original baseband firmware, as well as an unlock method for the new firware are in the works, so my recommendation would be to just hold tight with the 1.0.2 firmware until the kinks are worked out.

Downgrade from 1.1.1 to 1.0.2 – Link
Want to update to FW 1.1.1? READ THIS FIRST! – Link