Bottom half of iphone screen not working

Since you must have a 2G, you can jailbreak and unlock to whatever version you want. Use Redsn0w.

However, I doubt a restore will fix this. Have you tried rebooting (holding home and power buttons until the phone turns off then on)? Your digitizer is probably bad or the connection to it.

Yes, like Aggie said above.
Its not a software issue.
You might need to fix the screen. A restore or anything like that wont fix it, its a hardware failure.

Bottom half of the screen :-(

If the bottom half of your screen is not functioning a restore of any kind will not fix the problem. It sounds like you have a 2G if so you will find that the expense of replacing the screen may be more than purchasing a new iPhone as an OEM replacement comes with the LCD and Glass Digitizer as a single unit. You can find these pieces separately but I do not recommended it. Lastly, the repair process on a 2G is more difficult than the 3G or 3GS and many first time DYI types have made more of a mess out of the rear case just trying to get in the unit. I always recommend owners of 2G phones to really consider their other options such as purchasing a used 3G/3GS. With the new iPhone close to release and AT&T increasing their termination fees, one might want to look at it from an economic point of view. If you need it repaired we can do that or find a local iPhone repair shop near you.