An unlocked iPhone 3G is a little closer to becoming reality, according to the iPhone Dev Team.
Gizmodo picked up on a video produced by the iPhone Dev Team demonstrating that it has gained access to the baseband processor used by Apple in the iPhone 3G. The baseband chip is what controls the connection between the phone and the mobile phone network, meaning that a software download that could let you use your iPhone 3G on a carrier network other than the ones officially designated by Apple could be released soon.
I'm sure you remember the fuss aboutfrom the four carriers that were Apple's launch partners for the first iPhone. The iPhone 3G has proven a tougher nut to crack, because Apple apparently changed the baseband to make it more difficult to exploit than the baseband used on the original iPhone. You can unlock your iPhone 3G to use it on another carrier , but what the iPhone Dev Team is trying to accomplish is a software-based unlock that you would just download and install.
There hasn't been as much demand for unlocked iPhone 3Gs, given the much greater distribution of that phone around the world. However, there are still some countries, like China, that don't carry the iPhone, and there are still some users who want to use their iPhones on a different carrier than the one designated for the iPhone in their country.