I found this post by OriginalMasta and thought it was worth posting for others who have this question. There seems to be some confusion on how to downgrade.

How to downgrade 3.0 beta firmware to 2.X.X:

If you have upgraded from 2.2.X to firmware beta 3.0, you are going to be expecting bugs and lag all over the place especially NOTES and MESSAGES - mms doesn't work at all on AT&T right now either. So unless you are hard core about the new API's and want to get a head start on your new 3.0 apps, I see no reason to even deploy this beta 3.0 on your iPhone over 2.2.1 which is really stable release IMO. I did notice safari in 3.0 beta being FASTER than in 2.2.1. I really want the MMS to work but it's not worth the sluggishness and a few of my paid 3rd party apps crashing in 3.0 beta.

To downgrade, here is what you will expect to see and this is how to counter it (these steps may vary but I will explain my encounters):

1) Doesn't matter if you have itunes 8.1 (the newest build). IF YOU GET error 1600 or error 2100; error 1600 being a good sign ;-)

2) First thing: Get a hold of the older firmware, say build 2.2.1 (via pwnagetool - it doesn't even matter regarding the yellowsn0w unlock anymore cause your baseband is no longer
2.28.00 if you installed 3.0 beta)

3) Ensure iTunesHelper process is terminated. Check it in activity monitor. Kill it if it's running. You can have itunes up and running if you want doesn't matter


4a) CONNECT YOUR IPHONE via usb cable then connect to the computer. It will start up with apple logo. Let it boot then when it's completed, TURN OFF PHONE (hold on/off button at top until slide to power off is seen; then power off)

4b) wait 5 seconds after phone is OFF. THEN HOLD DOWN HOME BUTTON and ON/OFF BUTTON at the SAME TIME. Hold for 5 seconds. Count 1 beeeep, 2 beeeep, 3 beeeep, etc.

4c) RELEASE THE ON/OFF BUTTON and WHILE STILL HOLDING THE HOME BUTTON, count to 9 seconds. 1 beep, 2 beep, 3 beep, etc.

4d) iPhone should remain black AND if you haven't already done so, load up iTunes. It will immediately prompt you that your iPhone needs to be restored. If this doesn't happen, simply repeat steps 4b - 4d BUT this time hold down the HOME and ON/OFF button on iPhone for TEN seconds in step 4b.

5) When in DFU restore mode, the iPhone's screen is black. You can then click the alt/OPTION button (on your keyboard) and the restore button in iTunes bringing up a custom firmware load dialog window. Find that 2.2.X firmware you made with pwnagetool.

6) Click OPEN in the dialog window then the firmware will load into the iPhone.

ERRORS: If you get an error 1600, this is actually ok. Just do the following:
* With iTunes still up (and your iPhone no longer showing up in iTunes), HOLD DOWN the HOME BUTTON AND ON/OFF BUTTON on iPhone. count to TEN. Then let go the ON/OFF BUTTON but still hold down the HOME button on the iPhone. iTunes should redect your iPhone and it's state is in RESTORE mode again.

Let go the HOME button on iPhone after the "you need to restore your iPhone dialog box" appears. Then hold down the ALT/Option keyboard button and then click the RESTORE firmware button in itunes. Go thru the dialog screen and you should be able to load up your custom firmware 2.2.X.

Now the above steps was what I found out after trying to downgrade and having failed 20 times in a row. Here's what I did originally:

Alternative steps that didn't work:
1) Put phone in DFU mode. Start up iTunes. It detected iPhone in restore mode. I tried to downgrade with ORIGINAL unmodified APPLE 2.2.1 firmware and 2.2 (after 2nd attempt) but I came across same error 1013 and error 21. It would load the firmware then crash half way giving me those iTunes errors (you can see the iPhone loading meter almost halfway full).

2) Next I tried to use a HUB between the iPhone and the computer...but still resulted in error 1600 and sometimes error 2100. So no go on that

3) When the original unmodified apple firmware 2.2.1 tried to load and died half way, the phone rebooted itself and went into the usb cable -> iTunes screen (which is called the RESTORE MODE - NOT DFU MODE)

4) Then I realised that error 1600 has something to do with the DFU mode. I turned off the phone (by holding down the on/off button on iPhone while the USB->itunes screen was on the iPhone). Then I just held down the HOME and ON/OFF buttons on the iPhone for ten seconds; then i let go the ON/OFF button after ten seconds counting out loud WHILE STILL HOLDING THE HOME BUTTON DOWN. Itunes detected the iPhone again in restore mode. I alt/option clicked the restore button in itunes and loaded my custom pwned 2.2.1 and this time, it installed 100%

I hope this will help others. So if you see error 1600, don't fret. Simply hold down the HOME button and ON/OFF button on iPhone for ten seconds then release on/off button on iPhone while still holding the HOME button - count to ten again or whenever iTunes redetects your iPhone. It should work flawlessly.

I've tried this TWICE and it works!

Hope this helps someone?