NOTE: For the time being, this tutorial is only for Mac users. I will definitely update all the posts, once dev team releases the Windows jailbreak tool (redsn0w).
1) Jailbreak your iPhone 3G 3.1 using PwnageTool 3.1.
Here is the tutorial:Link. (Like I said MAC users only)
2) Once you have jailbroken your iPhone, tap on cydia.
3) Then Tap on manage tab at the bottom and choose sources.
4) On the top-right corner you will find edit button, select that and then tapadd button. You will be asked to enter a url. Enterhttp://repo666.ultrasn0w.com and tap on add sources. (That last “o” is actually the number zero “0”! If you use the letter “o” you’ll get an error.)
5) Cydia then updates your sources.
6) Once this is done. Tap on search at the bottom of cydia and in the search box look for ultrasn0w.(0 in the word is number zero and not letter o).
7) Now select ultrasn0w and install it. (T-Mobile users should disable 3G before installing ultrasnow).
Restart your iPhone.
9) Congrats now your iPhone is not alone jailbroken but also unlocked. Use any carrier of your choice 
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Good Tutorial man..
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