Let me first start off by quoting the iPhone-dev Team:

Disclaimer!! This is a purely technical post with no pragmatic use!

Sadly you will not read that they have unlocked the iPhone 3G. They have posted a few updates over the past few months giving us some idea of what is going on with the 3G unlock. It seems they have hit a snag while trying to use a specific exploit. They were able to get the baseband to stop responding to the OS. They then tried to restore the device multiple times to no avail.

Without getting too technical, they were able to fix the issue and even tried to reproduce the issue but had no luck. Reproducing this error would have been a Good Thing and possibly would have gotten the Dev Team one step closer to unlocking the 3G. So, "two steps forward, one step back".

For all of the technical jargon please check out this the Dev Teams Blog. Good thing is, we all know the iPhone Dev-Team is still hard at work for all of you looking to use your iPhone 3G on a carrier besides AT&T. Have faith, it should only be a matter of time.

[Via blog.iPhone-dev.org]