The iPhone Dev Team have released a video demo of their latest unlocking tools, including yellowsn0w, doing its magic on an iPhone 3G running OS 3.0 which is set to be released sometime in the next 24 hours. They've also revealed the development of a new tool, ultrasn0w, which they claim should be able to unlock any iPhone to-date, running any OS version.
Video demo after the cut
yellowsn0w will get its release shortly after Apple push out iPhone OS 3.0 - the Dev Team are being cautious, so as not to give Cupertino's engineers any time to scupper the jailbreak/unlock setup - but ultrasn0w won't see daylight until Friday at the earliest. There's no telling right now as to whether the iPhone 3G S can be jailbroken and then unlocked.
As ever, the tools to do all this will be free - if someone is trying to charge you, they're not legit. In the video below, skip to around the two-minute mark to see the actual unlock demo.