That's strange. I'm on 3.0 and she is 3.01. My notifications is right under my WiFi under settings, but hers isn't there, and I can't find it anywhere else.
I don't think thats the issue, though, because my notifications are set to off and my phone still lights up and previews an incoming text.
She says that it was working as of two days ago, and she hasn't installed anything via cydia in that time... she mostly has games, not a whole lot of cydia stuff installed... themes mostly, but she says she hasn't installed any new themes since it stopped working yesterday.
That's strange. I'm on 3.0 and she is 3.01. My notifications is right under my WiFi under settings, but hers isn't there, and I can't find it anywhere else.
I don't think thats the issue, though, because my notifications are set to off and my phone still lights up and previews an incoming text.
Notifications should only show up when you install an application that uses them, I believe. Do you have like Ping! or something installed that she does not? If so, that's why.
Anyway, if I were you, I'd do a restore to 3.1.2 and then jailbreak it with blackra1n - http://blackra1n.com - (if you don't need to unlock it). If you require a carrier unlock, use PwnageTool from the Dev Team.
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K a b a M o d e r n FOLLOW ME ON TWITTER iPhone 3G / OS 3.1.2 / White / 16gb / blackra1n'd / holla!
I had this same problem back when i was jailbroken on 3.0.1. When blackra1n came out, I updated to 3.1.2 and jailbroke with blackra1n and i did not have any problems since doing that. my texts come in fine with notifications and everything. so updating will probably fix the problem for you!