The iPhone Dev Team is still hard at work unlocking the iPhone 3G, luckily they are keeping everyone in the loop in regards to their progress. They haven’t achieved an unlock yet but they have reached a milestone on that road by successfully downgrading the modem baseband firmware to an older version. Here is their screenshot:

This image is the “About” screen from a 3G iPhone that was bought in a store last week. As you can see the modem firmware version has been successfully downgraded to an older “beta” firmware. This is not an unlock (yet), but it is our illustration of the first progress made with regard to hacking the 3G baseband.

We have accomplished this by being able to execute our own code on the baseband that allows us to circumvent security checks and flash the baseband with older, disallowed firmware. Please note this has been accomplished using software only, the iPhone 3G has not been disassembled or hardware modified in any way.