i would restore the phone...start out on a fresh slate. When you upgrade, sum apps arnt going to work.
Update your iPhone through iTunes...simply plug it in, and click update.
After you have updated and made sure everything is working, you can then begin to jail break it.
Install ZiPhone. If you have already activated your phone and you just want to jail break it, select the 3rd option down. "jailbreak"
make sure you have you iPhone docked when you do this process.