I'll keep it short and straight forward here, so it wouldn't take that long for you also to make your phone running on latest 3.0 OS. Let's begin the rock...
Note: You must have iTunes 8.2 running on your computer (Mac or PC)
Declaration: You are advised to take expert's advice before continue with unlocking procedure described below, or do it on your own risk.
1. Connect your iPhone to computer, and it'll launch iTunes. It'll prompt to upgrade your iPhone with latest version available. Here you need to select 'Download only' option. It'll save firmware on your computer hard disk.
2. It is always better to 'Restore' firmware to iPhone if you want to completely format your iPhone. I tried with restore only so will suggest you also to follow that. Restore, and browse to fw file you just downloaded. It will take a few minutes and your phone is virgin again.
3. Time to jailbreak your phone now so it's usable at least (without phone feature working), and for that you would need redsn0w 0.7.2. Download the tool and rebuild your phone with it. Just follow simple navigation wizard in the tool (you can even follow default options) and your iPhone will be opened thereafter. Make sure you opt for 'Cydia' app installation when ever it's prompted in the wizard, ok?
4. Now you have a jailbroken iPhone 3G installed with 3.0, but still you have one step remaining to finish unlocking and without that you won't be able to make/receive calls on your device. That is software unlock using ultrasn0w utility.
5. Connect to internet thru WiFi, and launch Cydia in your iPhone.
6. In Cydia, go to 'Manage/Sources', then 'Edit', then 'Add'. Enter URL: http://repo666.ultrasn0w.com/, and now reboot your iPhone 3G. It'll a little longer than usual to complete reboot process.
Once done, you have completely unlocked iPhone 3G with OS 3.0 in your hand. Enjoy!
OK, the tutorial is fairly simple. If not, please contact me by submitting comments below, and I'll be happy addressing your issues. Good Luck.