Here are the steps for a successful 2.0 to 1.1.4 downgrade for those of you that updated to 2.0 and realized what a mistake it was. (Thanks goes to Geeb for finding the iTunes 7.5 solution, Thanks goes to Crumpx for the pwnage method). Note that this has been performed on a PC.

Ok, so you updated to iTunes 7.7 and then installed 2.0 and you’re stuck. Here are the steps to downgrade to 1.1.4. Note that the result of this guide will be that you will be back to 1.1.4 version of firmware the baseband of 2.0 (4.05.04_G).

Step 1) The first problem in your downgrade is that you probably are getting error 20 in restore mode and error 160x in DFU mode. This is due to iTunes 7.7.  So, you now you need to uninstall iTunes 7.7 and install iTunes 7.5. Make sure after your iTunes 7.7 uninstall you reboot your pc as it requests you to.

Note for OSX users:
If you are on OSX and want to attempt to downgrade your iTunes, you can try these steps:

Load up Terminal and type the following:
killall iTunesHelper
sudo -s
rm -r /Applications/iTunes.app
rm -r /Library/Receipts/iTunesX.pkg
rm  ~/Library/Preferences/com.apple.iTunes*
rm -r /Applications/iTunes.app
rm -r /Library/Receipts/iTunesX.pkg
rm  ~/Library/Preferences/com.apple.iTunes*
rm -r /System/Library/PrivateFrameworks/MobileDevice.framework

Step 2) Now that you have  iTunes 7.5, you will still have the DFU driver for 7.7. This is good and will allow the process to work. Put your iphone into DFU mode using the DFU steps. Make sure you follow these step. You will not have any display on your device in DFU mode. If you see the cable and connect to iTunes, you did not get into DFU mode.

Step 3) Restore using iTunes 7.5. You will get an error like 1011, 1012, 1013, 1015. This is normal and expected. An error 1601, 1602, 1600 or anything else is not ok.

Step 4) Once you get error above, leave iTunes open and kick your phone out of restore mode. I recommend just loading winpwn(PC) or pwnage(MAC) and pwning the device at this point. If pwnage fails to work, you need to restore your phone again. You should be able to use normal restore mode, however. Other ways to kick out of restore mode may be ibrickr, jailbreak 1.1.2 (boot phone), iLiberty+.

Step 5) Once completed, you have a pwned device with baseband 4.05.04_G from firmware v2.0.

Step 6) To get back to 04.04.05_G (1.1.4 baseband) load bootneuter. If you don’t have this, install it from installer. Run bootneuter with Neuter, 4.6, and unlock. When it’s done, you will have an unlocked 04.04.05_G right back where you started. Unfortunately, this only works if you have neutered your phone before the upgrade. If you did not, you will have to follow the steps below instead.

If you get  a boot neuter error like 05, 02 or such, you need to follow these steps. Unfortunately, there is no safe answer to this one.The only method I know of to do this is to use a patched version of Ziphone as described here. Before you do this, you should know the risks.  Your other option is to just wait for dev teams pwnage v2.0. Direct download link for pc and mac and instructions for use.

Troubleshooting:
Some of you have reported “I am in DFU mode and keep getting error 20 from iTunes restore”. Answer, you are not in DFU mode. Follow the guide and the DFU link. An iPhone in DFU mode has no image on the screen and looks powered down.

Some of you are reporting error 160x (1600, 1601, 1602, 1604 etc) on the iTunes downgrade while in DFU mode. I suggest trying another PC. You may still have some residual files left over from the 7.7 install. Make sure you are in iTunes 7.5 with drivers from 7.7.