Ok just came across this in the AM, and am very excited. Although Iphone3G browsing is not very slow, there are certain times you hit an area where it only has Edge coverage. And when you load a webpage full of javascripts ads your load times per page are horrible. Well there is not a solution. Simply by replacing the host file with the updated host file, you will block majority of the advertisers, the host file will redirect them locally. It works on my phone running firmware 2.1, and should work for you until you do a restore then you will have to do this again.
Very Easy Process.
1. Connect to iPhone via SSH. We have guides on our site for this
2. Broswe to /private/etc on the iphone
3. Copy over the new host file. Download from
here.
Done reboot the phone
Source