If you are in process of downgrading your iPhone or iPod Touch you will more than likely be downloading the older firmware directly from apple.com. When you download this firmware it is provided as a zip file with a .zip file ending such as iPhone2,1_3.1_7C144_Restore.zip. If you unpack this file it will include a couple directories and numerous files as listed below.
iPhone Firmware Zip File Contents:
10/24/2009 07:11 AM . 10/24/2009 07:11 AM .. 05/22/2009 12:36 AM .fseventsd 05/22/2009 02:10 AM 281,214,976 018-5302-002.dmg 05/22/2009 01:59 AM 12,769,604 018-5304-002.dmg 05/22/2009 02:00 AM 12,777,796 018-5306-002.dmg 05/22/2009 02:29 AM 21,097 BuildManifest.plist 05/22/2009 12:48 AM Firmware 05/21/2009 11:32 PM 4,695,492 kernelcache.release.s5l8920x 05/22/2009 02:10 AM 1,763 Restore.plist 6 File(s) 311,480,728 bytes
Just Rename The File By Modifying The .ZIP to .IPSW:
As you can see there are three .dmg files which I initially thought would require some form of extraction to create the .ipsw file required to restore the firmware on the iPhone. After looking around a bit I noticed that you are not required to do this at all but instead you just need to rename the .zip ending to .ipsw. So if you downloaded iPhone2,1_3.0_7A341_Restore.zip from apple.com then rename it to iPhone2,1_3.0_7A341_Restore.ipsw. You are not required to make any other changes besides renaming the file ending. Once the file ending has been renamed you can use the file to restore your iPhone or iPod Touch.