Ok... what i did when i got the same 1601/1602 error.... That time, im on iTunes 7.7... Uninstall them all including everything Apple submachine as updater, mobiles, quicktime and make sure you clean recycle bin... delete manually ur itunes library folder or you can rename it... when you're clean em all, restart ur pc....

Now, reinstall fresh iTunes (Prefer the latest 7.7.1)... It comes with all updater/mobile support/quicktime... Now restart ur pc again (dunno if necessary but restarting after any installation is always a good habbit)... Once pc boot up, Recook ur ipsw... At this cooking point, if you prefered to have all cydia,installer,utubefix,bootimage, you need atleast 600mb partition resized... some of them here claimed 550mb i enough to avoid error 6 but its not working on my machine...

My recomendation, Only pick Cydia+Youtubefix (Installer 4 is still beta and still sucks) and set partition to lowest 500mb... or more if you want to but there's always a bosstools to free some space... Now build ur ipsw and ipwner ur itunes rightaway after done.... (at this point, i restarted my pc again so it will be super fresh when restoring/flashing process later...

I hope this works.......

What firmware you choose? The Custom firmware or the ori firmware?

If you are getting 160x errors (1600, 1601, 1602, 1604) you may have used the wrong firmware image for your device.  Make sure you got the correct firmware image for your 2g or 3g phone. They are not the same.

use ipwner and pwn your itunes b4 you SHIFT+restore it...

holy cow boy! u can see the open ssh icon? u must be doing it wrongly.. hahaaa

act. openssh apps. dont need icon on home screen, after u install, it would enable by default. u need bosspref to enable/ disable the function

thats all..