As it's getting quite a lot of replies, I edit the orginial post with hopefully some solutions.

Tutorial for downgrading
Download
http://cache.saurik.com/umbrella/umbrella-4.01.08.exe (Here called: umbrella program)
http://appldnld.apple.com/iPad/061-8...5_Restore.ipsw (ipad 3.2.1 restore firmware)

1. So just start the umbrella program and connect your ipad. Wait a sec untill it's connected, in the log you will see
Device Detected - Device: INVALID X.X.X (XXXX)
2. Select advanced options, and some options will slide in teh program. Make sure that "ipad 3.2.1 (7B405)" (or "ipad3G 3.2.1 (7B405)" if you have a 3g ipad) is selected at the device/version and that "Cydia" is selected at the request form).
3. Hit "Save My SHSH"
4. If it's says "SHSH SUCCESSFULLY saved!", you did the job, only a couple of minutes away from firmware 3.2.1
5. Now go to Downgrade iPad OS 3.2.2 to 3.2.1 With Cydia SHSH
This page will explain you how to add something to the hostfile on your pc, just read the part below "How to Edit and Save Hosts file in Windows/Mac OSX", the part above that isn't important.
5. After following that instructions hit "Start TSS Server" (in the umbrella program), open itunes and shift-click the "restore" button (note: if your using windows and it would work, try to run itunes in administrator mode (right click -> run as administrator)). It will let you select the firmware you want to install, so you want to select the one you downloaded above.
6. Just sit back and wait, the recovery may take some more time that usually, don't freak out: it's supposed to take a little longer.
7. After the complete installation is complete, you can quit the umbrella program.

If your using a mac
These steps are posted by a mac user, as I am not one of them I just copied his reply:

1.) On MAC you do not Shift click....you ALT-Click.
2.) When you do that....iTunes asks you where is the firmware file. Direct it to that and there ya go.
3.) Run Umbrella OUT of the DMG file on MAC....otherwise the server will NOT start.
Your umbrella dowload link for other systems then windows can be found here :
http://thefirmwareumbrella.blogspot.com/

Possible solutions if it ain't working

1. Try a couple of times - some people here say it worked at them after trying quite a lot of times
2. Update tinyumbrella to the newest version, which you can download here: http://thefirmwareumbrella.blogspot.com/
3. Make sure you use itunes version 9.2 (if your not sure, you can always download the latest version from the apple site)
4. It's possible that it isn't going to work at all - i'm sorry for you. Almost the entire ipad/iphone hacking scene tells us that they aren't going to try and hack 3.2.2, their going to wait for iOS 4 (which will probably is going to be released around november this year). Why doesn't it work? In short: tiny umbrella tries to catch a signature file - a file being transfered from your ipad to apple. With this file saved to a server, you can fool itunes and let it install 3.2.1. But apple stopt to send those 3.2.1 signature files. Altough some people say they were possible to get it to work, in theory nobody should get it to work anymore.

Don't freak out
Whatever happens, your ipad cannot break (atleast, not by installing software onto it, if you'll trow it out of the window, it will probably still break ) If everything is lost, you don't know what to do and nobody can help you with your problems anymore, you can always restore it with itunes, just plug it in, and click the restore button on itunes. This will, however, install 3.2.2, so make sure you tried everything , oonly use this as last option!

Don't forget
After allt his worked, you installed 3.2.1 and you installed cydia, FIRST THING TO DO is open cydia and click the "make my life easier" button. If you somehow have to downgrade again in the future, it's going to save you a lot of time

Please reply or PM me if your having problems!

Cheers,
Simon

You must have had the SHSH backed up before hand, apple has stopped handing them out for 3.2.1. Anyone who hasnt already backed up the SHSH can no longer downgrade.

What is shsh and how do I back it up?

i tried the umbrella program to save my shsh in case I ever want to jailbreak. It says it saved it, I backed it up.

3.2.1 here

but I'm a total noob to this

Originally Posted by Dr.Gee

What is shsh and how do I back it up?

it is a small bit of code that authenticates that the version of iOS can be installed on the device.

each time you perform a restore itunes requests this info from apple, apple only gives out SHSH blobs for the latests iOS. So to downgrade you take the backed up SHSH info and trick itunes into thinking the apple server said its ok to install the iOS version on the device.

This method works. I just purchased an Ipad with 3.2.2 on it. Downgraded and now I'm JB'd. Thanks for the information!

You are as genius! I was gutted when accidently updated my firmware and could not jailbreak. I have looked everywhere for this.
Thank you soooooooooooo much xx

Thanks, only thing that pizzed me off was putting my ipad into recovery mode.

Power + Home till shutdown, then I had to work with power + home buttons to get my ipad into recovery mode. (i didn't documen the steps was more concerned in getting the 3.2.2 firmware outta my ipad! )

There is no reason to go edit the host file if your using Tiny Umbrellas TSS server. Your just adding extra steps.

confirmed working! I had not previously saved my ssh blob prior to updating to 3.22 on my ipad so wasn't sure this would work but it did - yeay! Just a couple of things that made it work for me. Updated to latest itunes 9.2.1.5 and re-saved the hosts file, ran in recovery mode without the unbrella ssh server running. Not sure why I had to save my hosts file twice once with old itunes and once while in itunes (updated) - whatever works gj, thought I would have to wait for a new jb