dtube has posted an execellent how-to here
on using iLiberty+ (Windows) to unlock a 1.1.4 iPhone. It's all in there but iLiberty needs some steps in between to work as described. It's all documented and can be found in threads here, but lots of new users don't read all and run into problems.
So I decided to write this up step-by-step. It's just a recommendation what to use and to do. I took some steps from dtube's post in here

Quote: [EDIT 07-07-2008] I have added the steps for Mac users to use the tutorial here [/EDIT 07-07-2008] Download latest version (1.3.0.113) for Windows here
Make sure your iPhone is at Firmware 1.1.4.

Step 1: Prepare iLiberty+ (only to be done once, iPhone not connected)

1.1 Install iLiberty+
1.2 Start iLiberty+
1.3 Goto iLiberty menu "Tools" and select "Options". A new window pops up
Quote: [EDIT 2009-05-15]Make sure the repo URL reads http://iliberty.insideiphone.com/repo.plist
The URL changed. Pic 1.4 shows the old outdated URL[END EDIT] 1.4 Select "Check repo at startup" and hit "OK"
1.5 Quit iLiberty and start it again
1.6 iLiberty will refresh the repo lists via Internet connection
1.7 Hit tab "Advanced" (on top)
1.8 Hit tab "Available on Repo" (on the bottom)
1.9 Activate (check box) "Installer", "International Support for iPhone 1.1.4" and "Relocate Fonts and Ringtones"
1.10 Hit botton "Download" (bottom right)
1.11 iLiberty will download the three. Tab "Local" (on the bottom) should read "Local (8)" now
1.12 Preparations are done for now. You may quit iLiberty for now or continue with jailbreak, activation and getting payloads on the iPhone

pics step 1:



Step 2: Jailbreak, activation and getting payloads on the iPhone

2.1 In iLiberty hit tab "Advanced" (on top)
2.2 Hit tab "Local (8)" on the bottom
2.3 Activate (check box) "Installer", "International Support for iPhone 1.1.4" and "Relocate Fonts and Ringtones"
2.4 Bottom tab "Selected" should read now "Selected (3)"
2.5 Hit top tab "Standard".
2.6 Activate (check box) "Jailbreak" (already activated), "Activate" and "YouTube fix" - nothing else!
2.7 Connect the iPhone to your PC
2.8 If your photo app starts, just quit it
2.9 If iTunes starts, don't quit it, just "park" it in the task bar. If iTunes does not start automatically, start it manually and park it in the task bar
2.10 In iLiberty hit the button "Go for it!"
2.11 iLiberty will pop up a window telling you something like "We are going to reboot device into recovery..."
2.12 Do what the dialog says: You have to disconnect the iPhone and then reconnect. Hit the "OK" button then.
2.13 Let iLiberty do it's job, text will scroll on your iPhone screen, you will end with a jailbroken, activated iPhone at 1.1.4 all needed software for the unlock on it.
2.14 iTunes might popup every now and then, just drop it back to the task-bar

pics step 2:



Step 3: Unlock the iPhone

3.1 Quit iTunes and iLiberty
3.2 Establish Wi-Fi access on your iPhone to your Wlan router
3.3 Start Installer on the iPhone and let it refresh sources. A window will pop up saying "Installer Update" is available, hit "Update Now". Go back to springboard and start Installer again. On the bottom you will see a red circle, "1" in it at "Update", hit "Update" (on the bottom). A new window will show "Community Sources", hit "Update All" (on top). When done go back to springboard (leave Installer).
3.4 In Installer select "Install" (on the bottom), goto "All Packages" and install "BSD Subsystem".
3.6 When done quit Installer, goto the springboard
3.7 Start Installer again and select "Sources" (on the bottom)
3.8 Select "Edit" button (on top), then select "Add" (on top)
3.9 In the dialog type iClarified - Apple News and Tutorials and hit "OK"
3.10 When done select "Done" (on top), then select "Refresh" (on top)
3.11 In Installer select "Install" (on the bottom)
3.12 Goto "iClarified" and install "BootNeuter"
3.13 Quit Installer, goto springboard
3.14 IMPORTANT: Goto "Settings" -> "General" and set "Auto-Lock" to "Never"!!!!
3.15 Make sure your iPhone does not run out of power. Best is to connect it to to your PC, if iTunes starts, just quit it.
3.16 Go back to springboard and start BootNeuter
3.17 You have set Auto-Lock to never and power connected to the iPhone, right??? In BootNeuter set Neuter=on, FakeBlank=off, Unlock=ON. Leave setting for "Version" as it is. It should look like the screenshot. Blue indicates active. Your setting for "Version" may be at 3.9 instead of 4.6, just leave it as it is.
[Bootloader information:] If the iPhone was OOTB = 1.1.2 it should read "4.6". Leave it the way it is then. If you used another unlock method before on your >= OOTB 1.1.2 iphone that downgraded the bootloader, it will show "3.9". Then you might set "4.6" here and get the original Bootloader back.[END Bootloader information]
If a window pops up letting you choose wi-fi-access, just cancel. Thats because CommCenter gets unloaded. Only hit cancel (the wi-fi window) BEFORE you hit "flash" in next step.
3.18 Hit flash and wait ... Don't touch anything. Let it run, when it finishes, your phone should be ready to use. If the above mentioned wi-fi window pops up during flash, just ignore it, dont touch anything. Wi-Fi will be back after process ended.

pics step 3:



Step 4. Additional sources and housekeeping

4.1 Start Installer, hit "Install" (on the bottom), goto "iClarified" and install "App Support Patch 1.1.4", "Region Patch 1.1.4" and "Volume Boost 1.1.4"
4.2 Once unlocked i would recommend to uninstall BootNeuter. If not and hit by accident it may damage your iPhone. To uninstall start Installer on the iPhone, goto "Uninstall" (on the bottom) and select Bootneuter to uninstall.

pics step 4:



Enjoy your iPhone