Most of the time while trying to restore your iPhone or iPod Touch in iTunes with iPhone x.x firmware, you may see the following message followed by an error code 1601, 1602, 16xx or 21:
The iPhone could not be restored. An unknown error occurred (16xx).
Well, there is a way out. iH8Sn0w has released a tool called iREB (iTunes Restore Error Bypasser) for both Windows and Macs which can give you your, Custom Firmware Restores, Hope back. The latest version of this program supports iPhone 3.1 firmware running on the iPhone 2G, iPhone 3G and iPod touch 1G.
Here’s Step by Step how to install it.
Step 1: Start iTunes and put your phone into DFU mode:
Putting phone in DFU Mode: Press and hold the Home button and the Power button at the same time. After exactly 10 seconds release the Power button. Continue holding the home button until you iTunes pops up a message telling you that it has detected an iPhone in recovery mode. At this point your iPhone/iPod touch screen will remain black.
Step 2: Now close iTunes and Start iREB on your PC/Mac.
Step 3: Select your device and wait for a few seconds till you get white or a red screen on your iPhone.
Step 4: Open iTunes. Now press and hold left “alt” button (“Shift” button on Windows) on the keyboard and then click on “Restore” button in the iTunes and then release the “Shift” button. Select a custom .ipsw file and restore it. Your 16xx errors are gone.
Note: iREB is not directly for jailbreaking. It is for indirect jailbreaks i.e. restoring to custom .ipsw firmware files via iTunes without any errors.
Best when used with the iPhone 3.1 Jailbreaking guide