I've just updated my first generation iPhone to the new Apple firmware version 2.1 available since a couple of hours. The specifics:

• I've used a first generation iPhone.
• The device has previously been pwned and was running firmware version 2.0.2.
• The unlock, jailbreak and activation has been done via PwnageTool 2.0.3.1.
• I'm running the device on Germany's Vodafone network (which offers a true flat for data and voice, as opposed to T-Mobile the official iPhone reseller over here...).
• I've used iTunes 8.0 on an Intel based iMac running the latest Mac OS X with all available OS updates applied.

To be clear: I have not used a customized version of the firmware. I simply selected the Update option offered by iTunes so the original non-modified Apple firmware has been installed.

Here is the out:

• The entire process took less than 10 minutes.
• My iPhone has been updated without any problems.
• After the update
• Device remains unlocked and activated.
• My wallpaper has been automatically restored.
• All email settings including the emails are still there.
• All SMS are still there.
• My customized carrier name (set via MakeItMine) is still there.
• All official installed App Store apps are still there, including all preferences, SQLite3 content, etc.
• Apps currently under development by my team and my provisioning profile are working fine.
• All SpringBoard Icons are in the exact same location as before the update.
• EDGE works fine.
• My music library is still there.
• Photos are still there.
• Custom ringtones are still there.
• Syncing via iTunes 8.0 works fine.
• Contacts & Calendar (Exchange push set up) came back, so they got deleted during update but were immediately synced back.
• Updating applications from the App Store and deploying self developed applications via Xcode is 1000% faster!
• All Cydia applications are gone.
• OpenSSH is no longer running.
• Cydia and Installer are gone.
• Call Forward message fix is gone. (Unfortunately has not been fixed by Apple in this firmware release.. .)

That said: If you're keen to update to the latest apple firmware which is supposed to fix many minor and major bugs and make iPhone more reliable when it comes to, uhm, phone calls :-) it seems to be safe to go! I'm going to comment on my impression if iPhone firmware 2.1 later. My first feeling is that the responsiveness of the UI has improved slightly.

Obviously I'm eagerly awaiting an updated version of PwnageTool to get Cydia back as there are quit a couple of apps I love and like which will sadly never make it to the App Store...