Downgrade iPhone 3G OS 4.0 to 3.1.3 or lower

Apple released iPhone firmware 4.0 Beta 1 for iPhone developers to develop and test their applications with new API extensions released with new iPhone SDK. Upgrading to 4.0 with Ultrasn0w/Blacksn0w installed will cause people to lose their unlock and jailbreak for iPhone 3G. OS 4 beta 1 contains a baseband update 05.13.03 for iPhone 3G and 3GS. So if you accidentally updated your iPhone 3G to OS 4 here is the handy guide for downgrading.
Remember this will not downgrade your baseband only your firmware will be downgraded. It’s possible to downgrade OS however we strongly suggest you to carry on with OS 3.1.3 until Dev team update Pwnage Tool or redsn0w Tool.

Step by Step Guide to Downgrade iPhone 3G

Step 1: Make sure you have latest iTunes installed, Now connect your iPhone to your computer.
Step 2: Put your iPhone 3G in DFU mode with following instructions.

• Connect your iPhone to your computer.
• Turn iPhone off.
• Hold power and home together for 10 seconds (exactly).
• Release power but keep holding home until the computers beeps (observed on a PC) as a USB device is recognized.
• A few seconds later iTunes should detect your iPhone.
• If the Restore Logo is present on the screen, you are in Recovery Mode, not DFU.

Step 3: Once your iPhone is in DFU mode following message will be appeared in iTunes. Click on “OK” , Now hold Option key while clicking Restore in iTunes and browse the OS 3.1.2 or below firmware for your iPhone 2G, 3G. Now the restore process will take 10 – 15 minutes.

Step 4: If you encountered an error message like 1011, 1013, 1015, just ignore them(Actually the firmware3.0 is already successfully installed). Simply launch RedSn0w and do the Jailbreaking Unlocking process again.