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Redmondpie has post an Video guide to how to use new Ultrasn0w 1.2 to unlock your iPhone 3G/3GS, and read the following guide if you need it:

The iPhone Dev-Team has released the updated version of carrier unlocking tool called Ultrasn0w which can unlock the latest iOS 4.2.1 and 4.1 firmware on iPhone 3GS and 3G on basebands later than 05.13.04. Since iPhone 4 has different baseband OS, It’ll take a little while longer for the Dev Team to unlock it on the latest firmware.

Follow the instructions posted below to unlock your iPhone 3GS or 3G on iOS 4.2.1.

How to: Update iPhone 3GS & 3G to 06.15.00 Baseband for Unlock:
Step 1: Ultrasn0w 1.2 unlocking requires that your phone is jailbroken on 4.1 or 4.2.1 firmware with 06.15.00 baseband. Follow the complete guide posted here (for Redsn0w) to update your iPhone 3GS or 3G baseband to 06.15.00 and jailbreak it on iOS 4.1 / 4.2.1.

How to: Unlock iPhone 3GS & 3G on iOS 4.2.1 / 4.1:
Step 2:
Once you are done with the jailbreak, you can now unlock your iPhone on any baseband using Ultrasn0w 1.2 from Cydia. To do this:

  • Start “Cydia” on your iPhone.

  • Touch on “Manage” tab on the bottom.

  • Now touch on “Sources” as seen in the screenshot below:

  • Touch on “Edit” and then on “Add”. You will be prompted to enter a url source as seen in the screenshot below. Type http://repo666.ultrasn0w.comand touch on“Add Source” to add this repo if you haven’t already.

Cydia will now automatically update your sources by following a series of automated steps.

  • After installation is completed. Search for “ultrasn0w 1.2” in Cydia and install this application. This app will automatically unlock your iPhone so that you can use it with any carrier.

Step 3: Now simply restart your iPhone and voila! you should now have a fully unlocked iPhone 3GS or 3G, running iOS 4.2.1 !

Video instructions for the above tutorial is embedded below:

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