Ok, well most of the jailbreak tutorials will cover how to get past the activation screen. The error after downgrading a 1.1.2 phone to 1.1.1 is normal. Anyways, here you go (I copied this from Hackint0sh):
1. Enter *#307# press call, now use the back button on the top of your screen to remove *#307# , now enter 0 , press call, press answer, press hold, press decline. And you get to the contact list. And thereafter every time you push the homebutton you just slide the "emergency call" slide, then enter 0 , press call, press hold, press decline.
2. Push contacts, end call and you get called again, this time hit decline and you access one of menus with favorites, you can edit contacts, do a test ride on keyboard, take photos etc.
3. Now edit a new contact and type in "prefs://1F" as web-address and "http://jailbreakme.com" as an additional URL.
4. When you tap "prefs://1F" you can now select your favorite WiFi gateway.
5. Now press the home button and move the slider to the dial-pad.
6. Now you can go back to the contact list by Dialing 0, push call, then answer, then contacts, then hit the "http://jailbreakme.com" web address you typed in.
7. Scroll down to the bottom, click "Install AppSnapp". Safari will exit and you'll return to your springboard. Wait for the phone to reboot (BE PATIENT). You are now jailbroken. and are able to use Installer.app.
