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Note:
For Jailbreakers and Unlockers, If you don't have SHSH blobs of your current jailbroken firmware, then STAY AWAY from this upgrade.
Steps:
Step 1: Download iOS 4.1 Firmware and iTunes 9.2.1 [Links at the end of page]
Step 2: Connect your Device to Computer then launch iTunes
Step 3: An iPhone icon will appear on the left, Click on it
Step 4: Now hold left “Shift” button (“Alt” button on Mac) and Click on Restore, If it doesn't work then try going in DFU Mode or Recovery Mode.
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Step 5: Now, point iTunes to iOS 4.1 you already downloaded.
Download Links:
iPhone 3G - iPhone1,2_4.1_8B117_Restore.ipsw - Multiupload
iPhone 3GS - iPhone3,1_4.1_8B117_Restore.ipsw - Multiupload
iPhone 4 - iPhone1,2_4.1_8B117_Restore.ipsw - Multiupload
iPod Touch 2G - iPod2,1_4.1_8B117_Restore.ipsw - Multiupload
iPod Touch 3G - iPod3,1_4.1_8B117_Restore.ipsw - Multiupload