clipped from: howto.wired.com   
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Here's an iPhone update that comes to the wiki via Rob Beschizza from the Gadget Lab blog regarding the firmware upgrade to version 1.1.1.

(These updates are gathered from around the net, and may be variously right, wrong, or completely illucid. Fixes and updates are encouraged and appreciated.)

If you've unlocked your iPhone but have not upgraded it:


• Don't upgrade it! Tell iTunes, "No!" It will almost certainly not work afterwards, with no reliable remedy yet available.


If you've unlocked your iPhone and already upgraded it:


• Your phone is bricked until further notice. It can be reactivated with an AT&T SIM if you unlocked it with iPhoneSIMfree, according to iPhoneSIMFree.


• There are anecdotal reports that the Genius Bar will restore unlocked brickPhones if you're lucky, or if you lie to the Genius.


If you've hacked/jailbroken your iPhone but have not unlocked it: