1) Plug in your jailed iPhone or iPod Touch on the latest firmware (1.1.4). If you have an iPhone, it should be activated at this time.
2) Download the latest version of ZiPhone (3.0) for Windows or Mac from http://www.downloadziphone.org/
3) Open ZiPhone
4) You may wither leave iTunes open or close it. If you choose to close it, also close iTunes Helper in Activity Monitor so it does not reopen when you are jailbreaking. You may also leave iTunes open while jailbreaking, but remember not to touch it until the jailbreaking is done.
5) In ZiPhone, press the advanced tab. Then check off “Jailbreak (iPhone or iTouch).” Make sure nothing else is checked. Then click “Start Advanced Process.” This method will work with either the iPod Touch or iPhone, but there are alternative buttons on the main page. For the iPhone specifically, click “jailbreak” under iPhone. For the iPod Touch, click “Jailbreak & Activate” under iPhone/iPod Touch.
6) Watch Ziphone do its work. You will see a bunch of code running down your iPod or iPhone. This is exactly what is supposed to happen so just wait and don’t touch anything. You will also see near the end (about 30 seconds) the Zorro image. This is ZiPhone installing Installer, BSD Subsytem and Open SSH. These apps are essential for installing many other apps on your iPhone or iPod Touch.
7) When it is done, your iPod or iPhone will reboot, it will say that you can edit the home screen and you will see that beautiful installer icon. You might want to unplug and plug it back in so that iTunes will recognize it.
8| Celebrate!
Heres a video tutorial:

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