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Cydia SHSH Server
Cydia/Saurik Server is a server that is maintained by Saurik. It stores SHSH blobs for devices that use Cydia's "on-file" feature. For more details see SHSH and TinyUmbrella.
Usage on iOS 4.x
To use the server to restore to a firmware no longer being signed by Apple (e.g. 4.x), you must first jailbreak and use Cydia's "Make your life easier" option. Then add the following line to /etc/hosts (Mac OS X/Linux) or C:\Windows\System32\drivers\etc\hosts (Windows XP+):
74.208.10.249 gs.apple.com
Note: On Windows, make sure you open hosts as Administrator. Then go along with the restore process. If the restore fails after "Verifying iPhone restore with Apple" with iTunes error 3194 or something similar, you have not set it up correctly or saurik's server doesn't have your SHSH for that version.
How it works
It uses the hosts file to redirect the Apple firmware server to saurik's. His server has a ECID SHSH database, just like Apple's. When an older firmware request is sent to Apple, it will deny the SHSH request and error out. When it's requested at saurik's, if you've saved it, it finds the SHSH and continues with the restore.
iOS 5 update
This process no longer works to restore to iOS 5.x. Instead, you have to download your SHSH blobs to your computer, stitch your SHSH blobs into custom firmware, and use that to restore. See the JailbreakQA guide to restoring to iOS 5.x using SHSH blobs.