The iPhone 3G has now unofficially been unlocked to accept third party applications from sources other than the App Store. This unofficial program apparently does not remove the carrier lock that weds the iPhone to AT&T. There is no cost for this program which can be downloaded (at your own risk) at the link below. Realize that ANY unlocking you do voids your warranty. I’d recommend waiting at least a week to get feedback from others who have done this. Personally I’m not doing it because once the phone has been altered from the standard configuration I find it impossible to figure whether crashes are the fault of the unlock program or the normal iPhone code.

Here’s the capabilities of the software as described on the developer blog:

So, currently (when released) PwnageTool 2.0 will support:-

iPhone (1st Gen) with 2.0 - Activated, Unlocked & Jailbroken, (with support for third party applications).

iPod Touch with 2.0 - Activated & Jailbroken, (with support for third party applications).

iPhone (3G) with 2.0 - Activated, Jailbroken (with support for third party applications).

We’ve made some progress on the baseband unlock of the 3G device, but at this point PwnageTool will not support 3G unlocking or BootNeuter on the 3G device. It is, of course supported on the first generation device with 2.0. We’ll push out an update with 3G support if and when it is completed.

As soon as we fix this up and test a bit more we’ll be ready for release, we’ll get back to you with a release schedule soon.

Please loosen that seatbelt slightly while our cabin crew serve you complimentary drinks.

iPhone Dev Blog via Gizmodo