George Hotz a.k.a GeoHot has released blackra1n RC3, which is an update to a 1-click jailbreak that adds activation options and an add-on blacksn0w, which unlocks latest iPhone 3G and iPhone 3GS baseband version 05.11.07. To use blacksn0w, make sure you have this new baseband (check under Settings –> General –> About –> Modem Firmware) and if not, then update to a stock 3.1.2 firmware.
It is pretty easy to use and worked perfectly with my iPhone 3G. Besides the tool, there’s a blackra1n application that gets automatically installed on the iPhone after jailbreak, which gives you option to install Cydia and some other alternatives like RockYourPhone and the ‘sn0w’ option to use blacksn0w unlock solution as well.
Please note that if you have an iPhone 2G, you can still jailbreak using blackra1n but blacksn0w will not unlock for you. You must use BootNeuter available in Cydia for that purpose. Also, if you purchased an iPhone 3GS or iPod Touch (any capacity) in October or later, there is a high probability that you have a new model. Blackra1n currently performs only a tethered jailbreak for these new devices, which means you need to use blackra1n every time you boot the device, otherwise all your jailbreak data gets wiped.
Here’s see how it works.