There have been many reports by users, that they can’t get SBSettings to work on their jailbroken iPhone/iPod OS 3.1.2
SB Settings appear to install fine but don’t run at all.

No matter how you have jailbroken your device firmware (custom firmware 3.1.2 or using blackra1n) here is the fix:
1) Using Cydia, uninstall Winterboard and reboot your device
2) Using Cydia uninstall Mobile Substrate. Your device may freeze after this, don’t panic. Just turn it off by pressing simultaneously the Home and Power button for 30 seconds.
3) Turn on your device again. Using Cydia uninstall SBSettings and reboot

4) Now, run Cydia again and install these packages in the following order:
Mobile Substrate, Winterboard, SBSettings
Reboot your device and you should have SBSettings working fine.