So, I had bought my dad an iphone 2g a couple of years back and unlocked it for him. It runs a really old OS - 1.2.1 or something. Which is the latest firmware I can upgrade to, and how do I do it? I’ve really been out of touch!
The latest is 3.1.2. Check ‘iClarified’ before you try anything.
one question, since ive already unlocked the iphone earlier, do i not need to restore it to the factory settings? will the “restore” option in itunes brick my phone? or will it do the job?
ok, the current version on the phone is - 1.0.1 (1c25)
is this more than enough? … iClarified - iPhone - How to Unlock/Jailbreak Your iPhone 2G on OS 3.1.2 Using PwnageTool (Mac)
and, is there any way to take a backup of the contacts and restoring them later?
i gues the latest unlock code for 3.1.2 is still not available
You could right click on your phone’s name in iTunes(on left hand side pane) and select backup to backup your contacts, sms, and application data … later once you’ve installed the latest firmware you could restore from this backup 
thanks a lot. will do tomorrow. any thoughts on the unlocking method link i pasted?