What will it achieve
Firmware 1.1.4 is not noticeably different from 1.1.3. It fixes some bugs, like the out of order SMS messages problem that some people had, but if you're on 1.1.3 and haven't noticed any problems, then you might not want to bother with this. If you are on an earlier version of the firmware and are ready to upgrade, you might as well go straight to 1.1.4 using this guide.
Yes, you can use this method on any iPhone with any version of the firmware!
For this method, we are all indebted to the iPhone Dev Team.

What you need
• An iPhone, doesn’t matter what firmware version or whether or not it is unlocked.
• A Windows computer or Mac OSX (Tiger or Leopard) computer.
• iTunes (version 7.5 or 7.6).
• About half an hour or so of spare time, most of which will be spent waiting for things download and install.
• This guide. Alternatively, you can find guides here at ModMyiFone or here at iClarified.

Summary
• Download iLiberty+ to your computer.
• Restore iPhone firmware up to 1.1.4 in iTunes.
• Open and run iLiberty+ to jailbreak, activate and unlock your phone.
• Install any required 'tweaks' such as localisation features.
• All done! Too easy!

Now to break that down into BabySteps…

1. Before you begin
1.1 Be aware that I am not an expert on either computers or iPhone hacking. I’m just good at translating what the experts say. If you get into trouble following these instructions, it is more likely than not that I won’t have a clue why or what you should do about it.
1.2 Back up everything on your phone, because if you follow the recommended steps in this guide, all your content will be wiped and you'll have to reload it at the end.
1.3 Read through this guide carefully and make sure you understand and can follow all the steps.

2. Optional Clean Up of the iPhone
2.1 If you are the cautious type, or if you have tampered with your phone a lot and know that it is probably full of junk that no longer needs to be there, you might wish to follow the BabySteps Clean-up Guide to clean it up as much as possible before upgrading. If your phone is presently on firmware 1.0.2 or earlier, it is especially recommended that you do at least the revirginsing from the Clean-up guide (Section 4), unless you know it was unlocked with a method that doesn't require this.

3. Preparation
3.1 In the web browser on your computer go to iLiberty+ Downloads and from the downloads, download the version of iLiberty+ that is appropriate for your computer.
3.2 When the download has completed, double click on the downloaded .zip file to extract the iLiberty+ application.

4. 'Restore' up to 1.1.4
4.1 Connect iPhone to the Computer and open iTunes.
4.2 If your phone is in recovery mode after 2.1 above, skip to 4.4.
4.3 If your phone is not in a recovery mode, it is not a requirement that you put it into one but I recommend that you do. To do this, with your iPhone connected to the computer, hold down the Power button and the Home button simultaneously for about 10 seconds. After the screen has gone blank, release the Power button while continuing to hold down the Home button. Continue to hold down the Home button until iTunes tells you it has detected an iPhone in recovery mode. Your iPhone's screen will still be blank.
4.4 When iTunes will tell you it has detected a phone in recovery mode. Click OK. Then click on “Restore”. It will tell you that it will wipe everything and upgrade to the latest software, and ask for confirmation. Click “Restore and Update”. Click to confirm whatever agreements and confirmations it asks for. (If you have chosen to skip the recovery mode, you should still use the "Restore" button rather than the upgrade button.)
4.5 Get yourself a drink while you wait for the new firmware to download and install itself. It took about 15 minutes for mine, but it will depend on your internet speed. It takes up 195MB of space on the phone.
4.6 When it is finished you will get the “Slide for Emergency” screen on the phone and a message from iTunes telling you that you have an unsupported SIM card.

5. Run iLiberty+
5.1 With your phone still connected to the computer and iTunes open, open the iLiberty+ application. iTunes will quit automatically when you run it, but you do have to have it open first.
5.2 Check three boxes - Jailbreak + Installer, Activate, and Unlock.
5.3 Click on the “Free my iPhone!” button.
5.4 Wait for several minutes, during which you will see some status reports on your computer and a lot of white code text scrolling up your iPhone screen. It will then reboot, and the iLiberty status report will say “Enjoy!”. Your iPhone is now jailbroken, activated and unlocked.
6.5 Quit the iLiberty+ application.

6. Tweaks
6.1 Install “BSD Sybsystem” by tapping on “Installer”, then on “Install” at the bottom of the screen, then on the “System” folder, then on “BSD Subsystem”, and then on “Install” at the top of the screen. You will probably get a notification warning you not to change your password. Take note of it if it is the sort of thing you might have otherwise done, and then press “OK”.
6.2 You may need an app.support patch if you are in an unsupported country. For the Australians, go to installer and add http://wpool.com/iphone to your sources. Then after the sources have refreshed, Tap on “Install”, then on “Localisation (1.1.4)”, and install the three items there - “Aus +61 number support”, “Aus Carrier Support” and “Aus Number Formatting”. Then reboot the phone. The first and third of these take care of the caller ID and number formating issues that were covered in other BabySteps guides, but these newer Installer versions are much simpler to do. The other one adds Aussie carrier logos and gets rid of the annoying “Call Forwarding” message.
6.3 You will probably need to program your voicemail button. Open the phone dial pad and tap the following code: *5005*86*xxx# where xxx is your phone company’s voicemail number. Then tap call and after a second, the code will have been set.

7. You’re done... but...
7.1 ... it is strongly recommended that, if you didn't do it at 2.1 above, you delete the back-up details of your phone from iTunes before reconnecting the phone to iTunes. To delete it, disconnect your iPhone from the computer and open iTunes. From the iTunes menu, open "Preferences". Click on the "Syncing" tab. Click on the name of your iPhone in the list that comes up, and then click the "Remove Backup" button. This means that when you then do connect your iPhone to iTunes, you'll have to set it up as a new phone, but this is simple and quick.
7.2 ... you’ll now want to dock and sync your iphone.
7.3 ... you’ll want to verify that everything is working, calls, SMSs, emails
7.4 … you’ll want to reinstall your third party applications.

Thanks once again laughingbird for writing this up.

Thanks again. My 1.1.3 iPhone just crapped but it was sooo easy to set up 1.1.4.

Good guide. Intensely verbose for my liking, but some people need every detailed explained to em

I will link to this in FAQ when I do the next update.

Thanks for this, just got a brand new iPhone and following this made the unlock/activate quick and painless.

I still can't believe AT&T let me buy one without hammering me to sign up for a contract (I'm in the US at the moment, heh)

That's the point, of course.

You, Decryption, are not someone who needs their guides in a baby-steps form. I write for the people who do. There are lots of us out there who have no idea about this stuff, but who can follow a guide if it doesn't assume we already know anything. When I started writing these guides, it was because of my own experience of trying to work it out from the various posts on the forums, and realising that almost everyone who knew what they were talking about could no longer remember what it was like to not know anything. I'm trying to hang on to that memory for the sake of others who are still where I was not long ago.

LIV2's Guide to 1.1.4

Step 1: Restore to 1.1.4 in iTunes
Step 2: ZiPhone with the "do everything option"
Step 3: add wpool.com/iphone and install all the localization options under localization(1.1.4)
Step 4: ???
Step 5: Profit!

See, there's a good example of the sort of guide that assumes that people already know stuff. A complete newbie, if they tried to follow this, would run into the following sorts of problems (depending on how far they got before giving up):

- What does "ZiPhone" mean? Is it a verb, and if so, how do you do it? Or is it a thing I have to get? If so, from where? Is it software or hardware?

- What do I add wpool.com/iphone to? (I just upgraded a phone yesterday for a bloke who had no idea what the "Installer" icon on his phone was - never touched it before)

- Why has the number display gone all funny on my phone? I live in Canada and followed your guide to the letter.

- Where have all my contacts and music gone?

Believe me, after W9cae and I did the first couple of Babysteps guides, we were nearly driven crazy by the number of personal messages we got with questions like those. There are lots of those people out there.

I'm not knocking LIV2's work at all. I'm just pointing out that such a guide is written for a different group of people than the guides I write. I wouldn't be able to do what I do if people like W9cae and LIV2 didn't do what they do. I simply take their kind of descriptions and translate them for the many people who don't speak fluent hacklish.

For those who do speak hacklish, there is a little summary before step 1 in the guide, and that's all you'll need. And it looks remarkably like LIV2's guide.

It's kinda funny though mate, being that I work in customer service and should be giving everyone babysteps all the time.

But I don't, much to the dismay of my customers

Nothing wrong with your guides, I'm able to skim through them and do it without having to read everything, and the non-experts also get a chance at doing it!

Great work!

I really should give 1.1.4 a shot. Might do now that I've seen this.

Dugg as well, btw: Digg - iPhone: Upgrade to 1.1.4 through iTunes - BabySteps Guide

Did this Yesterday on a 8 & 16g iphone using the above guide & Ziphone 2.5c, worked a treat. Thanks for the guide

Thanks for this. I'm going to try it on the weekend. I'm current working in China though and the phone number are at least 8 digits. Do you know what I should do if I want to have caller ID work properly here? I'll change it when I go back to Australia but I'll be here in China at least another year. Thanks heaps.

Very well done laughingbird
Witten the way it should be written, knowledgeable people can skim through but peeps that don't know so much can't just fill in the gaps with anything in the basic guides listed...........

I've updated this guide to use iLiberty+ instead of ZiPhone. The pwnage tool looks good too, but I haven't tried it, so I'm not writing a guide for it.