iOS 4.1 came out a couple days ago, and with it came a new baseband update, going from version 01.59.00 to 02.10.04. The baseband is a critical part of the iPhone unlock and UltraSn0w isn’t currently compatible with baseband 02.10.04.
Many people are eager to update to iOS 4.1 and try the new features that come with it. Obviously if you rely on a jailbreak/unlock, you should hold on to it. If you don’t care about unlocking options at the time but you think you might in the near future, then updating to iOS 4.1 while preserving your baseband is your best bet…
If you have your SHSH blobs on file, you will always be able to downgrade back to iOS 4.0.2 or an earlier version. If you haven’t saved your SHSH blobs, I suggest you do now. As usual when performing that kind of hack, you are proceeding at your own risks.
This step by step guide and tutorial will show you how to update your iPhone to iOS 4.1 while preserving the baseband. It is fairly easy but I suggest you read the tutorial a couple times before, just to make sure you understand every part of it.
See the original instructions here.