As I am typing this I am "Pwning" my iPhone eventually attempting to reach 2.0 jailbroken and activated on AT&T. I searched for a video and the Dev Team actually made one showing how to do it. I expect it to work but I think having a user from this forums give feedback is always better.
The Video is located here:
http://www.engadget.com/2008/04/03/v...ool-in-action/
They do it with T-Mobile and I am going to do it with AT&T.
Updates:
-Launched Pwnaged and clicked iPwned after browsing Apple's 1.1.4 firmware.
-iPhone restarted and is pwned
-Placed into DFU Mode
-Created custom 1.1.4 firmware
-Using iTunes restored to custom 1.1.4 firmware
-Restore worked
-using Pwnage creating a custom 1.2.0 firmware
-custom firmware made
-Placed 1.1.4 phone in DFU mode
-Itunes opens and option restore custom 2.0 firmware
-Verifying
-Silly iTunes likes the ipsw..iphone restarting

-Turns on fine, App Store is not there and I am on AT&T?
-Restoring iPhone to recent version..utoh spinning wheel..nvm restarted
-iPhone restarted, Signal Working, Legit 2.0 firmware
Easy, fast only took 30 mins, and expect much more to come from this.
Differences:
App Store is not showing
iTunes recognizes iPhone as 'untitled playlist' instead of "iPhone"
Update 30 mins later:
Signal not working
Bugs like crazy
App Store is Gone
Wifi Cuts on and Off
Not worth it right now, I tried doing a custom 1.1.4 ipsw and same thing. I am going to have to go back to the begining