Thanks for responding. I followed your instructions but the box is already unchecked. Any other suggestions? I turned off my anti-virus and firewall and do not have Skype or IM installed. I used a command prompt to find out what was using port 80 and it says my anti-virus but I had disabled it so I don't know what else beyond uninstalling the anti-virus and reinstalling after downloading the updated TU. Even if that worked I would have to uninstall it every time I wanted to restore with TU it would seem, right?
ftr, I already saved my 4.1 shsh files with TU prior to trying to get the newest version so at least I have that.
If you are already navigating to the Hosts file, you might as well update it manually. All we are trying to do is redirect iTunes' authorization to Cydias servers. Just add the line :
74.208.10.249 gs.apple.com
to the hosts file. To add it in windows, find notepad in the start menu, then right click it and hit "Run as Administrator". Then navigate to the folder you found the file in and open it. Add the line then hit save. If the hosts file doesn't show up in notepad browser window, change the file type from .txt to all files, as the hosts file does not have an extension. After that simply restore in itunes by holding shift, clicking restore, and selecting the firmware.
On ip4, to preserve baseband manually, just wait until iTunes receives authorization to restore and starts restoring, then disconnect your internet. iTunes will restore and then at the end try to authorize the baseband, will not be able to, and the restore will fail with error 3004. Then simply use TU to kick the device out of recovery. Your baseband will be preserved, and your device will be on 4.1, or whatever you are restoring to.
There you go, minimizing TU use and doing it all easily, and manually.