1. Downlaod iPhone Firmware 2.2 and save it on your hard drive.

2. Connect your iPhone to your Mac or Windows machine and select your iPhone from the list of devices in iTunes. (read instruction of How to Put iPhone in DFU Mode if itunes doesn’t detect your iPhone)

For Mac Users

3. In the Summary Tab, Hold down Option and press the “Restore” button and select iPhone Firmware 2.2 file (Don’t press just restore button read below note)

For Windows Users

3. If you are using Windows hold down Shift and press the “Restore” button and select iPhone Firmware 2.2 file (Don’t press just restore button read below note)

4. After restoring download QuickPWN2.2 and use it to jailbreak your firmware 2.2. or use yellowsn0w to unlock iPhone 3G 2.2

Note: In step 3 it was an important that not to Just press the “Restore” button as it will result in restoring your iPhone with the latest firmware which is firmware 2.2.1 currently,

By holding down Option in case of Mac or Shift in case of Windows, allows you choose the firmware file that you want to downgrade to.

If iTunes doesn’t detect your iPhone due to any reason then follow below steps
How to Put iPhone in DFU (Device Firmware Upgrade) Mode.

1. Connect your iPhone to your computer.

2. Turn off your iPhone.

3. Hold power and home together for 10 seconds (exactly).

4. Release power but keep holding home until the computers beeps (observed on a PC) as a USB device is recognized.

5. Within few seconds iTunes should detect your iPhone.

Please Note: Above guide seems to be working for iPhone 2G but we are unaware of iPhone 3G. We will not be responsible if any there is any damage to your iPhone using above guide. do it at your own risk