From ModMyiFone - Wiki

Contents 1 Prepare. 1.1 Step 1. 1.2 Step 2. 1.3 Step 3. 1.4 Step 4. 1.5 Step 5. 1.6 Step 6. 1.7 Step 7. 1.8 Step 8.

Prepare.

THIS GUIDE IS FOR INTEL OS X USERS ONLY.

Props to Mark from hacktheiphone.com for some of the content here.

Step 1.

Make sure your iPhone is docked and charged.

Step 2.

From iTunes, make sure you have a backup of your phone and all settings (if you want to keep them). Simply connect the iPhone to your computer and iTunes will sync your iPhone. Automatically backed-up information includes text messages, notes, call history, contact favorites, sound settings, widget settings, certain network settings, and other preferences.

Step 3.

For Mac users, quit iTunes. Don't just minimize it, shut it down. If you have the iTunes Helper open, you must quit that as well. To determine if they are running, open the Activity Monitor program found in the Utilities folder inside of the Applications folder. If it is running, highlight it in the list and click the "Quit Process" button.

Step 4.

Make sure the iPhone is on.

Step 5.

Download the software restore file from Apple. Once the file is downloaded, most browsers may automatically decompress the file and leave a folder called iPhone1,1_1 on your desktop. If your browser did not do this, and you have an .ipsw file instead, then rename the extension to .zip and decompress it yourself.

Step 6.

Create a folder called phonedmg in your home folder.

Step 7.

Place the software restore files you downloaded from Apple (the iPhone1,1_1 folder) into the phonedmg folder. Do not place the whole folder in here, just what's in the folder.

Step 8.

Download the iPhoneInterface/Jailbreak package. Decompress the file and put the contents into the phonedmg folder.

You have now completed all the initial preparatory steps needed to mod the iPhone. You will never have to repeat these steps, provided you do not delete anything in the phonedmg folder.