No. It was a 3.0.1 and update was with pwnage tool generated ipsw for 3.1. Problem was really with the activation
Ok managed to fix this. I just restarted the process but this time i did not choose the option to have pwange activate my iPhone. All seems to work fine except that I have nothing in the carrier name. But i have bars and can make calls :)
Well I have iPhone 3G from Vodafone Portugal. I created the ipsw with pwnage tool and installed via iTunes. It boots ok but I get no connection to the carrier. This has been hapenning everytime I try to upgragrade just the system and not the baseband.