An exploit found by @Oranav is greatly appreciated by the whole community. Instead of reporting it to Apple some kind of compensation, he gave the heads up to the iphone-dev team. The world will be able to enjoy a fully software unlocked iPhone 3G - no matter what firmware, bootloader, or baseband you have, ultrasn0w will unlock it as long as you have the 3.0 firmware. From the looks of it, this may work for the iPhone 3GS, but we will know soon enough.

Skip to the 2:00 minute mark to see the demo.

this video is by the iphone-dev team (MuscleNerd)

Glad to see this happening - full unlock for the iPhone 3G!

This will be released Friday indefinitely!  Check out the official iphone-dev team blog here!