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I was able to upgrade to 2.0 without any problem. Phone is working and fine. The only problem is thirdparty applications and installer. There are no itunes store and app store either.
The 1604 error (and 1013 and a few others) can be overcome by using iNdependence or any of the other tools that kick the iPhone out of recovery mode.
The procedure in this how-to will keep your baseband unlocked but keep it at v4.04.05 (from 1.1.4). If you want to be unlocked at v4.05.01 (from 2.0) then you can do the steps outlined on this Dev Team wiki page
On 2.0 (5A240d) for a few days already. Yesterday try to install sample GLGravity using iPhone SDK beta 3 into the iPhone. Works great. Can we just install third party apps using the iPhone SDK the same way as installing GLGravity? Thanks.