to android 2.2.1 & a custom rom called Darkys Rom
Its better than standard 2.2 or 2.2.1 updates you get from Telstra/Optus
MUCH better. Faster. More Stable etc.
Here are the instructions from the start
1. Download, install & run z4root from here: http://www50.zippyshare.com/v/70574271/file.html
1A. click Root & be patient till its done
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2. Download darkys rom here & extract it on your computer somewhere: http://www.zshare.net/download/86121646fdc63834/
2A. [OPTIONAL] If this isn't the first time you're doing this, disable lagfixes if they're enabled, otherwise ignore this step if you're new
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3. Backup your data. this will wipe your entire phone
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4. Turn phone off, Press & hold these keys for a few seconds then release [Volume up + power + hard menu button] to access the Recovery Menu
Use Volume Up/Down keys to navigate & hard menu button to select options
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5. Choose wipe data/factory reset, after thats done turn the phone off
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6. Press & hold these keys for a few seconds [Volume Down+Power+hardMenu button ]. (Will bring up a screen saying 'Downloading'.)
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7. Run Odin (from the files you extracted) & connect your phone to the computer
You should get a message "Added"
7A. Tick 'Repartition' option & select the following files in ODIN
(from the folder you extracted the download to):
PDA: darky_odin.tar.md5
PIT: s1_odin_20100512.pit

7B. Press Start button & wait. Once Done, ODIN will look like this.

7C. The phone will reboot & a screen will come on 'Android system recovery '
Press the 'reboot system now' using the Home key and the phone will restart and boot.
Your phone is fully functional now
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Optional Extras
Configure the rom to add extra features
1. Go to android market place
2. Download install & run DarkyROM Configurator
3. Configure whatever options you like here, theres not many - Dont select "wipe" then click menu save & exit
4. Copy the file resurrection.zip (extracted from the original zip file you downloaded) to your INTERNAL sd-card
5. hold the power button down till you get the options -> reboot into recovery
once in recovery mode
5A. choose "install zip from sd card"
5B. choose "choose zip from from sd card"
5C. Find the resurrection.zip file & do it
5D. go back to main menu & reboot system
DONE
update to darkys rom updated version 9.5
1. download here & copy to your internal sd card http://www.multiupload.com/3GOGVFRY35
2. Copy the file to your internal sd
3. reboot into recovery
4. choose install zip from sd card
5. choose choose zip from sd card
6. choose the rom file & flash
7. reboot
Flash a new modem
1. Go here and download whatever modem you like
http://forum.xda-developers.com/showthread.php?t=876391
2. Copy the file to your internal sd
3. reboot into recovery
4. choose install zip from sd card
5. choose choose zip from sd card
6. choose the modem file & flash
7. reboot
[Mod Edit :BH: Change title to reflect that this is only for the Samsung Galaxy S]