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If your device currently has a software version prior to 2.0 (1.x) and you are updating to software version 2.0 or later, all data on your device will be erased in order to perform install the new software.
However if a previous customer updates their apps using i Tunes on their Mac or PC, then i Tunes may show them any new update.
All i Phone or i Pod settings are restored to their factory condition. Do not disconnect your i Phone until the update has finished.
Whenever you update or restore your i Phone or i Pod software, Apple highly recommends that you perform a synchronization operation before updating in order to back up any changes since your last sync. When i Tunes opens, select your i Phone under Devices in the Source List on the left. In the i Phone Summary pane, click Check for Update.
Those of you who own an i Phone 3G or an i Pod Touch 2G (non-MC model) can jailbreak/unlock i OS 4.0.2.
To jailbreak your i Phone 3G 4.0.2, you will have to use Red Sn0w 0.9.5b5-5.