Not as easy as i expected, actually. But finally, i made it.
There ARE some discussions in the Dev Team community on this topic here, where I learned the confirmed fact that the first generation iphone could be updated to the latest iPhone OS 3.0 safely. In summary, the basic steps are: DFU downgrade to 2.0.2, pwn it(unlock) by QuickPwnRC2, then UPDATE to iPhone OS 3.0. Done.
So this afternoon i decided to give it a try(I know it’s in beta and buggy, but its new features(official version here) are really attractive, esp. just after i watched the presentation).
Some screenshots below, to give you an idea of what the latest iPhone OS 3.0 will look like.
Now let’s back to the topic of how I managed to get there.
But before that, let me explain where I am: firmware 2.2.1, iTunes 8.1, and an very old iphone(BL 3.9, 4G capacity).
I first downgraded the phone to 2.0.2 in DFU mode(here’s the youtube how-to video in case you need it). Then I downloaded QuickPwnRC2.zip(download link). Until now, everything is fine. But when I launch QuickPwnRC2.exe to start pwning, the problem came.
I stucked in the ’select firmware’ screen. I tried re-downgrade, find another QuickPwnRC2 download link , but no luck.
I then decided to give QuickPwnRC3 a try(‘coz at least someone said it worked too). Of course the pwnage process went successfully as expected.Then I shift+update to iPhone OS 3.0(iPhone1,1_3.0_7A238j_Restore.ipsw, torrent file(3G OS 3.0 included as well) here: http://tinyurl.com/chycn5).
And here came the ‘unexpected surprise’(‘coz most guys said RC2, not RC3,is the real magic): my iPhone, with OS 3.0 installed, kept activated 
But I just celebrated too early. ‘Coz when I started to rename the phone(untitled playlist to Cui) and hit enter to confirm, the phone suddenly rebooted. And after it came alive, the screen became the emgercy-call one, which means I failed: activation is needed 
Even though i don have a backup phone, and normally I used my phone most in the Monday, I still wanna give it a second try. By it, i mean, QuickPwnRC3. At that time, i thought perhaps I would make it after the first failed DFU-downgrade-then-upgrade try. You know, I do had similar experience before in the unlocking steps..
So I put the phone into DFU mode again, downgrade to 2.0.2, then make QuickPwnRC3 to unlock the phone(actually the phone has been keeping unlocked all over. Here choose unlock is actually to take use of RC3’s activation actions). Then launch iTunes and shift-update to iPhone OS 3.0.
The iPhone kept activated and unlocked when done, not surprisingly. Then I synced with iTunes after announcing it as a new phone. Sync finished successfully. I then played a little on the new OS. Well, features are there. sweet. Just some functions, sometime, are a little bit slow. Well, beta, understandable, right?
In the end, I thought perhaps I should try a reboot and see if this time the phone would be locked or not. I then pressed the on/off key, slide to power off, waited the spinning icon going off for a while, then power it on, wait until the spring board launched.
Now guess what? No emergency-call screen, just down to the home screen! Yeah! I’m done! Cheers!!
So, if you wanna do the upgrade yourself, please make sure your phone is the 2G version. and you’re fully prepared.
Good luck.
