"1234" - Used to behave differently, it would format flash completely. It was changed for various reasons and now essential cleans up flash and goes out and ask for the exact same load it had before. So if you were running 6.0(2)SR1 it would go and try and reload 6.0(2)SR1.
"349" - Essentially replaces the old functionality of 1234. This sequence does format flash and causes the phone to come up and ask for Term70.default.loads. So you have to follow the rules for this and make sure you are on a DHCP enabled network, have the right TFTP server set in Option 150 and most importantly that you have a valid Term70.default.loads and matching application files on that TFTP server.