The files contain all data used by iTunes for software restoration of iPod Touch and iPhone firmwares and is also used for jailbreaking.
Users can find their IPSW for safe keeping at the following locations:
In Mac OSX: "~/Library/iTunes/iPhone Software Updates"
In XP: "\Documents and Settings\[username]\Application Data\Apple Computer\iTunes\iPhone Software Updates"
In Vista: "\Users\[username]\AppData\Roaming\Apple Computer\iTunes\iPhone Software Updates"
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