From ModMyi - Wiki

This is an old, outdated guide. This issue doesn't affect iPhones with 2.x or greater firmware.

This is how to fix your iPhone after jailbreaking or unlocking, then connecting to iTunes it says it only has 300MB.

Step 1. Get Installer.app on your iPhone, if your firmware is 1.0.2 or older (Settings>General>About) use Apptapp from: http://iphone.nullriver.com/beta/ If your firmware is 1.1.1 go to jailbreakme.com from your Safari browser.

Step 2. Install BSD Subsystem on your iPhone Install vt100 terminal on your iPhone. Type in:

cd /private/var/root Then: mv Media Media_sym Then: mv Mediaold Media Then Reboot the phone, this should fix it.