Here are the steps for old bootrom 3gs to get to 4.2.1 w/o updating baseband:
1. Download the custom ipsw. Courtesy of rgarjr in post #3. His custom ipsw works. I guarantee it.
2. Download the factory ipsw. http://www.felixbruns.de/iPod/firmware
3. Download latest iReb. http://ih8sn0w.com
4. Download latest redsn0w. https://sites.google.com/a/iphone-dev.com/files/home/redsn0w_win_0.9.6b6.zip?attredirects=0&d=1
5. Download iTunes 10.1, get it set up properly, quit and reboot. If already installed, skip this and go to the next step.
6. Turn off phone with USB plugged in, run iReb and follow instructions to make phone flashable.
7. Run iTunes, put phone into DFU mode
8. Shift-Restore and chose the custom ipsw. Let it update. It'll say the sim card is not compatible or something after it reboots if you are using foreign sim.
9. Run redsn0w to jailbreak. It will want the factory firmware which you downloaded. Ensure only Install Cydia is checked. Hacktivation is enabled by default. This step was scary because my redsn0w crashed after you click the last submit button. But it worked anyhow.
10. Sync and restore your itunes junk.
11. After that, get your wifi setup, run Cydia and install ultrasn0w if you require unlock.
12. Try http://www.bingner.com/SAM.html if you are feeling adventurous. I chickened out
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worked great! iphone 3gs old 05.11.07
thanks a lot