iPhone 3G is Unlocked - yellowsn0w
Finally, iPhone Dev Team has released their latest software unlocking tool known as yellowsn0w, which unlocks iPhone 3g with the latest firmware 2.2 (baseband 02.28.00). In order to unlock the iPhone 3g, it has to be restored to firmware 2.2 through iTunes and then jailbreak it with either Pwnagetool or Quickpwn. yellowsn0w can be installed using Cydia or Installer by adding http://apt9.yellowsn0w.com/ to their source. iPhone needs to reboot after yellowsn0w is installed. On the slide to unlock screen, wait for 10-15 seconds and the network carrier name will appear on the iPhone screen. If it does not appear, remove and re-insert the sim card and wait for another 10 seconds.
For more details, please visit Dev-Team Blog
iClarified's visual tutorial on how to unlock iPhone 3g
Hackint0sh's thread on the iPhone 3g unlocks and issues
