Finally Solved this!!!
Ok, finally I downgraded! OMG, it took all day.
I was having the same problems as many others. I'm on Mac 10.5.6 and I guess they did something to the USB driver, because for the life of me, QuickPwn wasn't finding my phone.
I ended up going to a friend's house who has a PC, having him install iTunes on his PC, then running QuickPwn from there, and FINALLY it works! I thought I was going crazy. Here is a quick recap of how it all went down:
Downgrading from iPhone 3.0 back to 2.2.1 on a Mac OS 10.5.6 (in plain English):
1) Make sure you have 2.2.1 firmware in order to go back. This should be in your home/Library/iTunes/iPhone Software Updates. If you don't see the firmware update in there, then you can download them from Apple at the following locations:
iPhone 3G 2.2.1:
http://appldnld.apple.com.edgesuite...90127.aQLi8/iPhone1,2_2.2.1_5H11_Restore.ipsw
iPhone 1st gen 2.2.1:
http://appldnld.apple.com.edgesuite...90127.Mmni6/iPhone1,1_2.2.1_5H11_Restore.ipsw
2) Make sure you don't have a passcode on your device. I found this can make it harder to fix sometimes.
3) Connect to to your computer with USB cable, launch iTunes.
4) With the phone ON, press and hold the top sleep/wake button and the home button at the same time for 10 seconds. The phone should turn off at about 5 seconds. At 10 seconds, release the sleep wake button and just keep holding the home button for another 15 seconds. iTunes will detect the device is in DFU mode. (The screen should NOT be on. If it is, then repeat this step and try reducing the first 10 seconds to more like 8 seconds.)
5) Hold down Option (mac) or shift (pc) and click on the "Restore" button. Choose the new 2.2.1 firmware for your device.
6) About three-fourths of the way through, you'll get error 1013 and the phone will restart in recovery mode.
7) Launch QuickPwn and a message will ask you to hold down sleep/home buttons for 10 seconds. IF QUICKPWN CANNOT FIND YOUR PHONE and you're using Mac OS 10.5.6, then you need to find a PC and install iTunes & QuickPwn. You don't need to jailbreak your phone. Just that first step on QuickPwn will do. Once you get the slider bar (to unlock) go back to your machine, and sync as normal and it will copy your backup back on to your device.
QuickPwn doesn't work on virtual machines, so parallels won't work.
Damn, one little thing like that just ruined my day. But finally glad to get that solved.
Maybe someone found another way to get quickpwn to recognize on 10.5.6?