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Thanks for all of the replies guys :)

On my iPhone, Cydia says I have the SHSH for 3.1.2. So does that mean that I can do this?

ok, for the third time this thread... SHSH and editing the hosts file does not effect the process of restoring to a custom pwned FW.
All that is required to restore to a custom 4.0 FW is that you are already pwned and the phone has the old bootrom.
SHSH blobs & editing the hosts file are used to downgrade to now unsigned stock firmwares.
 
And I take it there is no way to do this on a windows machine without running a Mac OS virtual machine and installing Pwnage in that?
 
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