1. Download iPhone OS 3.1.2 from http://www.felixbruns.de/iPod/firmware/. There are other sites.
2. Follow Saurik's instructions on downgrading at http://www.saurik.com/id/12.
3. As explained in Saurik's post, this restore will "fail". Don't worry & move onto step 4 after the failure.
4. Download Blackra1n at http://blackra1n.com/ & jailbreak the phone using Blackra1n. Man, it's simple & fast - Great job, Geohot!
5. You will now have a jailbroken 3.1.2 phone with Blackra1n installed BUT no carrier signal - major problem!
6. Download Pwnage Tool 3.1.5 (Best instructions are at iClarified at http://www.iclarified.com/entries/index.php?caid=2&scid=11&seid=2) & use it to jailbreak up to 3.1.3. To my utter amazement this gave me a jailbroken iPhone with carrier signal. Hooray!!
Few extra facts to note here. I'm in Australia where we can unlock our iPhones from a carrier if we ask them, after which we can use any carrier's sim card. I have no idea whether this will work with Unlock software such as Blacksn0w.
Good Luck!
