That's not to say a workaround won't be found in the future, but for now any SIM users should certainly stay away from 1.1.1.
Super SIM and Turbo SIM users are also advised not to update, but we have less solid info about that.
As for when we'll have use of the i Phone again is unclear, but TUAW's Erica Sadun says "don't expect a jailbreak anytime soon," which doesn't seem promising.
Apparently the security is going to be a whole lot harder to crack this time around.
We've heard that i Tunes 184.108.40.206 can restore a bricked phone with the 1.1.1 update.
No confirmation yet, but feel free to let us know if it works for you in comments.
Important note: people are experiencing munged IMEI's.
"Delayed Green" says that he saw this "Incorrect SIM" error in the early unlock days and that he knows of no way to fix the problem. And the methods previously published just aren't working properly.
I have never had any device that is easier to update the firmware than my i Phone.
For anyone who may not be sure, firmware is basically the 'software' that runs a device's hardware.
Still, there are still plenty of ways you can stick it to the man. There's no telling when the i Phone will be re-hacked at all, and if you're interested in running 3rd party apps or using a non-AT&T SIM then 1.0.2 is where it's at for the time being.