There is a very manual tutorial up at xpwn.co.uk on how to Jailbreak your iPhone with the 2.1 firmware:

T14:19 <+geeb> http://xpwn.co.uk/2.1JBtut.txt
14:19 <+geeb> 2.1 3g jailbreak tutorial
14:22 < comm> geeb: has it been tested?
14:22 <+geeb> comm
14:22 <+geeb> yes by me
14:22 <+geeb> and others in #xpwn are running it now

The following are the instructions

Download the 2.1 firmware <--http://appldnld.apple.com.edgesuite.net/content.info.apple.com/iPhone/061-5198.20080909.K3294/iPhone1,2_2.1_5F136_Restore.ipsw

install itunes v8 (http://www.filehippo.com/download_itunes/) <-- all versions of itunes are there

Update the iphone with iTunes and make sure it is activated!

Uninstall iTunes v8

Uninstall Apple Mobile Device Support (From Add/Remove Programs in Control Panel)

Install itunes v7.7.*

Download quickpwn with the correct 2.1 bundle inside it http://xpwn.co.uk/quickpwn-gui-for-2.1.rar

Run quickpwn...select your iPhone1,2_2.1_5F136_Restore.ipsw

you can select cydia and installer and logos if you wish

When it is finished the phone will reboot...Cydia and Installer will NOT be visible

Download TotalCommander <-- http://xpwn.co.uk/tcmd704a.exe
Download t-pot addon <-- http://xpwn.co.uk/T-PoT.1.1.zip

Install TotalCommander and in the left pane navigate to T-PoT.1.1.zip and click on it. It will install t-pot automatically.

Download the mobileinstallation patch <-- http://www.sendspace.com/file/pcrxy6

Use Totalcommander to install patched mobileinstallation to /System/Library/PrivateFrameWorks/MobileInstallation.framework ... clickon the dropdown box top left and select network neighbourhood then t-pot.

Still in TotalCommander delete /private/var/mobile/Library/Caches/com.apple.mobile.installation.plist

Reboot the phone and all is good!

Thanks to the #xpwn crew...

Enjoy!

Thanks XPWN!