iclarified also has step by step instructions on pwnage 3.0 (which is not much diff than before)
http://iclarified.com/entry/index.php?enid=4254
For the 16xx error, found this on the dev-team blog comments:
Props go out to EriCKY for this 16xx fix:
1. download QuickPwn RC3
2. download iphone 2.0.2 ipsw
3. Run quickpwn rc3 and do everything it says untul your iphone has a white screen.
4. unplug your iphone, turn off quickpwn and turn on itunes.
5. shift click restore in itunes and pick the 3.0 jailbroken firmware :3
many are reporting success with this, I am getting ready to try it (once my wife is off the PC)