A member of the iPhone Dev Team, MuscleNerd, has given us a live streaming video demo of the yellowsn0w iPhone 3G unlock on a previously SIM locked iPhone 3G. The iPhone Dev Team decided to stream live on Qik.com so there were no arguments that the video was edited or modified in any way.
The first video that MuscleNerd streamed was explaining that the notch cut in his AT&T SIM card was for prior hacking development. The cut was made to fit the SIM proxy board of the Turbo SIM. The developers use the Turbo SIM to upload code to the chip and then have the code interact with the baseband. A few hours later they streamed the actual soft-unlock video live.
In the actual unlocking video, MuscleNerd shows that the phone is legitimately SIM locked to the AT&T network. He then shows that it is indeed locked by inserting a T-Mobile SIM card and attempts to make a phone call. MuscleNerd then runs the yellowsn0w program using terminal and the process is completed in just a few seconds. To show that the phone is unlocked he journeys to the about page which displays the T-Mobile carrier. MuscleMan then placed a call to the unlocked iPhone 3G confirming that the process has worked.