A Glen Rock teen has unlocked an iPhone for use on other carriers (he currently, allegedly, has it up and running on T-Mobile), posted instructions for doing so, and is selling the unlocked phone on eBay.
The instructions are almost too frightening to fathom unless you have excellent technical dexterity and superfluous iPhones you can potentially destroy. They require cracking the iPhone's case, soldering, meddling with firmware using a host of unfamiliar utilities, and "concentration."
George Hotz, who compiled instructions for the hack, says:
"So if you follow these steps, you should have an unlocked iPhone. I'm sorry about how hard they are to follow, but someone will get them to work, and simplify them, and simplify them more. Hopefully a software unlock will be found in the near future."
Meanwhile, "iPhoneSimFree.com" is claiming "the worlds (sp) first (and only) software driven sim unlocking service for the iPhone(tm). No need to open your phone. No need to solder." The site offers no documented backup of its claims, but does state:
"To silence any doubters out there, we are welcoming publications from around the world to apply to receive their iPhones(tm) unlocked free of charge. If interested, please submit an application via our Contact Us form. The top three applications will receive a free un-lock within the next 48 hours, which will be soon followed by the commercial launch of the software for public consumption. [...] Individual per unit licenses will be available starting next week. We are currently opening up our mail for bulk purchase enquiries of 500 licenses and above."
UPDATE: Engadget claims to have tested the iPhoneSimFree method, and that it works:
"The unlock process took only a couple of minutes. From our end it was totally painless. Once you put your new, non AT&T SIM in the device, you have to go through the usual activation process. [...] We tested with an active T-Mobile SIM -- after the hack was finished and we reactivated we immediately got full bars and the T-Mobile carrier info popped up in the top bar."