This is not the easiest guide, but it is for expert users and early adopters that have a 3g and Windows. The guide is courtesy of Geeb. This guide is for contract carrier subscribers only. If you are unlocking your 2g, wait for another method.
Update: I wrote a quick app and added it to Cydia to solve the icons not showing up after Cydia issue.
Update 2: Cydia is fixed. If you installed CacheDel, uninstall it and upgrade Cydia. I am removing step 17 from this guide.
Step 1) Download the 2.1 3g firmware or 2g firmware.
Step 2) Install itunes v8 - you can get all versions of iTunes here.
Step 3) Update the iphone with iTunes and make sure it is activated! (If you are currently jailbroken, use restore, do not use “Upgrade”).
Step 4) Uninstall iTunes v8
Step 5) Uninstall Apple Mobile Device Support (From Add/Remove Programs in Control Panel)
Step 6) Install itunes v7.7.*
Step 7) Download quickpwn with the correct 2.1 bundle inside it here.
Step
Run quickpwn…select your iPhone1,2_2.1_5F136_Restore.ipsw or iPhone1,1_2.1_5F136_Restore.ipsw from step 1.
Step 9) You can select cydia and installer and logos if you wish (make sure you select Cydia).
Step 10) When it is finished the phone will reboot…Cydia and Installer will NOT be visible
Step 11) Download TotalCommander and t-pot addon
Step 12) Install TotalCommander and in the left pane navigate to T-PoT.1.1.zip and click on it. It will install t-pot automatically.
Step 13) Download the mobileinstallation patch
Step 14) Use Totalcommander to install patched mobileinstallation to /System/Library/PrivateFrameWorks/MobileInstallation.framework … clickon the dropdown box [-\-] top left and select network neighborhood then t-pot. Reme,ber to back up your original mobileinstallation first!
Step 15) Still in TotalCommander delete /private/var/mobile/Library/Caches/com.apple.mobile.installation.plist
Step 16) Reboot the phone and all is good!
Thanks to Geeb and the #xpwn crew…