to remove the 88:88 problem just put a image (change the extension to .png) on the Library/Themes/TypoPhone 4 folder (use iPhoneBrowser or SSH method) Rename the image, LockBackground.png
iOS 4.2.1 changed the way wallpapers are set.
Go to the TypoPhone 4 folder (Library/Themes/TypoPhone 4) and open the style.css file with TextEdit (Mac OSX) or Notepad (Windows)