Via iPhone-Ticker.de: Neiluj1493, a 15 year old french iPodTouchFans.com user, has released version 0.3 of his PwnageTool for Windows.
“The program is quiet simple. Just put the firmware file in the installation directory, run the program and click on the first button (this will build the custom firmware), and then the second button (this will load the exploit in iTunes). Put your device in DFU mode, and restore with Maj.+Restore button and select the custom firmware.
You’re done ! And you’ve got Cydia with the 2.0 firmware !!!
The program is in 0.3 version and support iPod Touch and iPhone 2G ONLY.
The crashes problem are now fixed and you don’t need to run in compatibility mode. “
Get the program here, and let me know how it works out for you.
(UPDATE: works perfectly on my 1st gen iPhone!)