Update (December 2014) – Please refer to new updated posts on this topic (links given at the the end of this post)
WARNING: Phone flashing is a double-edged sword; it may be useful and dangerous at the same time. It may brick/damage your phone for good (if not done carefully), so please DO NOT flash your device casually or just for fun and follow all the instructions very carefully. I am not responsible if anything goes wrong anyhow.
In a previous post I have described normal flashing of Nokia mobiles with Phoenix. However the method described in that post works only when the phone is in working condition and is being flashed with original firmware (phone OS software). In this post I will describe use of Phoenix Service Software