Here is a small but nice article, which you should read before considering any update to your iPhone with the recent v1.1.1 Firmware.

In a probably vain attempt to clarify and stop iPhone slaughterings, as well as repetitive questions, here’s the facts about updating to 1.1.1. as of today, 28th September 2007.

1) If you have unlocked your phone at all, regardless of whether it’s to use another sim / carrier or even just for fun and you’re still using the AT&T sim, DO NOT UPDATE to 1.1.1 unless you want to render your phone useless. It will not work afterwards as things stand at the moment.

2) If you haven’t unlocked your phone and you haven’t jailbroken it and want to update to 1.1.1, you will not be able to jailbreak it afterwards as things stand. Until someone does Jailbreak 1.1.1, this will not change.

3) If you are still using Firmware 1.0.2, you can still synch with iTunes. If iTunes suggests you update your iPhone, just say no. In Preferences, you can turn off the setting to look for updates automatically so iTunes won’t even bother asking.

4) Your 1.0.2 Phone will not just brick itself. Apple can’t beam an auto bricker to your phone….You have to help them by trying to update to 1.1.1 after you’ve hacked it. Apple warned you, there’s countless tales of woe on these forums that should serve as a warning….JUST DON”T DO IT!!!

5) If you haven’t hacked your phone in anyway whatsoever and you want a cute Starbucks logo to appear everytime you’re near one (as well as the other updates) then you should be fine, as long as you’re aware of point 2.

Comments and other thoughts can be found via the linked page.