http://forums.macrumors.com/showthread.php?t=516349

only in this way you can downgrade to 1.1.4 jailbreak it and have an i phone with carrier and installer

wish you all luck!!!
bye bye Ervis

You will recieve the 1600’s errors if trying to use a custom. In order to get around this:

1. Uninstall iTunes 8 (see end for credits)
killall iTunesHelper
sudo -s
rm -r /Applications/iTunes.app
rm -r /Library/Receipts/iTunesX.pkg
rm  ~/Library/Preferences/com.apple.iTunes*
rm -r /Applications/iTunes.app
rm -r /Library/Receipts/iTunesX.pkg
rm  ~/Library/Preferences/com.apple.iTunes*
rm -r /System/Library/PrivateFrameworks/MobileDevice.framework

2. Install iTunes 7.5 (restart recommended)
3. Download the original 1.1.4 (iPhone1,1_1.1.4_4A102_Restore.ipsw).
4. Go into DFU mode on the iPhone
5. Option click and restore the firmware.
This is where people get stuck. Here is the problem. You might encouter an error in the 1600’s. If you do, shut down the iPhone and reenter DFU mode. Try again and you should be greeted with a 1500’s error, signifying success.
6. It is very important if you reach this stage to ONLY do this: open iLiberty+ and click Exit DFU Mode in the menu bar.
7. Wait a minute, and your phone should vibrate and be in Emergency Mode. Success!
8. Load iTunes and activate the phone.
9. Using iLiberty+ click Jailbreak + Installer. This process took no longer than a minute.

Notes
- Stay away from ZiPhone as it doesn’t work (I tried 3.0).
- In DFU Mode the screen would turn white when trying to install a custom firmware using iTunes 7.5. ZiPhone and QuickPwn say “Your iPhone is being rebooted” but it would just stand at the white screen.
- In Recovery Mode the screen would turn light blue.

Sources
1. Copy & Pasted from http://sleepers.net/news/guides/20-to-114-downgrade/