From ModMyi - Wiki

Welcome to Page 3 of our PwnageTool Usage Guide. This page will instruct you on flashing the custom .ipsw you created on page 2 onto your phone. Your iPhone / iPod Touch should still be plugged and and in recovery mode. Start iTunes.

iTunes will prompt you since your iPhone / iTouch is in recovery mode. Select OK.

You will see the following screen in iTunes. Hold option and select Restore.

Browse to the custom .ipsw we created on page two. Select it and then select OK.

iTunes will go through the normal restore process.

iTunes will give you the old your iPhone / iPod Touch has been restored blah blah blah screen select OK.

If you selected to install bootneuter then you will see the screen below. Bootneuter will run through whatever functions you selected. Allow it to continue and don't tamper with anything until it is finished.

Congrats! Your iPhone / iPod Touch now has a custom ispw loaded! You've been PWND!

If you have the 2.0 beta firmware and would like to pwn it continue to our PwnageTool Pwn Beta 2.0 Guide.