First of all, Erase All Content And Settings on a pre-3GS phone is slooooooooooooooow. In fact, while it is happening, only the Apple logo appears on the screen. (It may still be running)
can take several hours, depending on
the storage capacity of your iPhone or
iPod touch. During this time, the
device displays the Apple logo and a
Second of all, anytime you have an error message when restoring an iPhone, TS1275 is your best friend.
Error 1015: This error is caused by attempts to downgrade the iPhone, iPad, or iPod touch's software. This can occur when you attempt to restore using an older .ipsw file. Downgrading to a previous version is not supported. To resolve this issue, attempt to restore with the latest iPhone, iPad, or iPod touch software available from Apple.
Sounds like you want to restore to a more recent version, worst case just get the most recent jailbreak instructions with the most recent software that supports your hardware from the Dev Team Blog.