With the iPhone 3GS, every time you restore the firmware iTunes contacts Apple to verify the restore. Apple can then choose to sign off on the restore or refuse it.
With the release of iPhone 3.1 Apple is now refusing to sign the 3.0 firmware. This means that you cannot downgrade.
So in order to bypass this restriction you need to save the verification information Apple sends back when doing a verified restore. After iTunes sends Apple your ECID (unique-chip-id), if verified the firmware file will be personalized, integrating the ECID, SHSH (signature hash), and CERT blocks into it.
Purplera1n.com was created to save a file that contained just the signature hash for the iBSS file, as that is "sufficient"; however, someone needs to write a tool to use this file.
Saurik's solution saves the entire personalized firmware set required by iTunes to do a restore (full set of SHSH blobs) which will let you do a normal DFU restore in iTunes.
Unfortunately the ability to generate a full set of SHSH blobs via Cydia was only available for a very limited time. As soon as iPhone 3.1 was released Apple stopped signing the 3.0 firmware.
If you were one of the lucky ones and managed to have Cydia save your 3.0 or 3.0.1 ECID SHSHs then Saurik has created a server that duplicates the functionality exposed by Apple's signature server. By changing your hosts file to include 220.127.116.11 gs.apple.com iTunes will now contact Cydia for authorization to restore.
You can find the hosts file here: C:WindowsSystem32driversetchosts (Windows) or /etc/hosts (Mac OS X).
For the majority of users who did not get their ECID SHSHs on file with Cydia for 3.0 there is still hope. The greenpois0n exploit should provide a jailbreak for the 3.1 firmware. At this point it is imperative that you have Cydia save your full set of SHSH blobs for future downgrading.
We will be posting tutorials on how to use these features once they become available.
Saurik's writeup on this matter is far more detailed; however, we wanted to provide a simple overview of the situation. Use the link below to learn more...