Now You can Unlock your iPhone 3G in easy 5 steps. The DevTeam has developed and released yellowsn0w, its the world’s first tool to unlock iPhone 3G . To use this you need to upgrade the latest baseband 02.28. It can also support the older baseband on firmware 02.27.but you have to upgrade to firmware 2.2 with the 02.28 baseband. You can either download QuickPWN and jailbreak your iPhone 3G to firmware 2.2 or download PwnageTool. Download here

How to unlock iPhone 3G

• To unlock the iPhone First, download QuickPWN and jailbreak your phone. Update to latest firmware 2.2 with the 02.28 baseband, it will allow you to install Cydia or Installer. then it will start Rebuilding the IPSW and Sending the firmware.
• Add the repositories (DO NOT ENTER THESE URLs INTO YOUR BROWSER per Dev Team’s instructions).
  For Cydia enter: http://apt9.yellowsn0w.com/
  For Installer enter: http://i.yellowsn0w.com/
• Install yellowsn0w. Run it.
• Turn off the iPhone and install your third party SIM. If you are in the U.S. and are trying this with T-Mobile, you must turn off the 3G switch in Settings.
• Turn on the phone. Wait until your carrier pops up. If it doesn’t, take the SIM out and reinstall it.

Advantages of the Unlocked iPhone 3G

• Use any GSM Sim card worldwide
• No loss of features or functionality
• Enable Video Recording, RSS Feed, MMS messaging, Wi-Fi
• Install 3rd party apps
• Enable full ipod capabilities
• Enable GPS, Google Maps
• iPhone Stumbler to view all wireless networks in your area
• Vnc Client iPhone to interact with remote computers