Looks like that worked! Thanks kiran. Your guides, quick replies, and especially your ipsw's are brilliant! I really appreciate the work you are doing with this as although I'm an IT guy it took a while to make sense of how to unlock this and not brick your phone. Your posts are what finally made it make sense. (and your ipsw are what made it work)

The version on my phone is 2.2.1 (5h11) with a Modem Firmware of 02.11.07. You can see the screenshot at http://www.flickr.com/photos/wonderfullyrich/3470...
I did this using iPhone1_2_2.2.1_5H11_Custom_Restore.ipsw you posted above.
I've also now tried the 2.2 firmware iPhone1_2_2.2_5G77_Custom_Restore_iLikeMyiPhone_533MB_Activated.ipsw and the baseband still remains 02.11.07.
I haven't got a clue why it's not upgrading the baseband and curious if you've ever seen this before.