Update Feb 2011 - I have just spent 5 hours or so trying to get my poor old 3G jailbroken and unlocked again. Six months ago the process did see a lot easier. HINT - Make sure you use the correct RedSn0w version AND the correct restore file. If you don't you'll waste half a day like me. You can't use a newer version of RedSn0w or start with iOS 4.1 !!
JUNE 25th - 2010 - This little tutorial is designed for absolute beginners and will show you how to Jailbreak and Unlock your iPhone 3G (Not 3GS or Iphone 4 - 3GS & iPhone 4 users can use the following link and simply visit the Comex website using your iphone 3GS or 4). Jailbreak to allow apps banned by Apple on your phone and then allow you to unlock the phone, dump AT&T crappy cellphone service and switch to another cellphone carrier or cheaper AT&T plan. (See this link to upgrade to IOS 4.0.1.
First we'll upgrade you to the brand spanking new iPhone 4.0 operating system just released and then have our way with your iPhone. But first some basics.