O2 has started unlocking the iPhone in the UK for users who want to switch from the O2 network to Orange UK, the newest carrier to get the iPhone in the area. Users who signed up to have their devices unlocked have begun receiving text messages instructing them to replace the O2 SIM card with that of a different carrier (In this case, Orange), and connect the device to iTunes. It’s as simple as 1, 2, 3.

It’s pretty great news for those who want to switch, however, there’s always a catch, those who switch are still obligated to complete their contracts with O2. You can sign up to have O2 unlock your iPhone from their network by filling out the unlock form on O2’s website at the source link below.

Unlocking your iPhone
From 10 November, the iPhone can be unlocked for O2 customers in the UK.

Pay Monthly customers
Your iPhone can be unlocked at anytime free of charge. If you unlock your handset and place a non-O2 sim into it, you will still have to honour the remainder of the minimum term on your contract.

iPhone Pay & Go customers
For iPhone on Pay & Go, unlocking can take place 12 months after you’ve bought your iPhone for a one-off £14.69 fee which will be deducted from your airtime balance.

What do I need to do?
Firstly, complete the unlocking form – it will take up to 14 days for the iPhone to be unlocked and we’ll text you to confirm the unlock request. Then place a non-O2 sim into the iPhone and connect to iTunes via a USB cable. iTunes will confirm that the iPhone has been successfully unlocked.

- source: o2.co.uk

The iPhone Dev Team has pushed out a great update for their IPhone 3G and 3GS unlocking tool, ultrasn0w. This update fixes a bunch of little bugs here and there.

Features:

• Works on both 3G and 3GS
• Works on hacktivated devices
• Works regardless of how you jailbroke your device
• Doesn’t patch any mach-o binary whatsoever. (Doesn’t require a separate patch as each new firmware comes out).
• Doesn’t install any additional daemon
• Has no race conditions, no popups about “Missing SIM”, no network issues
• Is almost 7000 times smaller than its nearest competition :)
• Is available now via Cydia. Source repo is http://repo666.ultrasn0w.com (that’s ultrasn0w with a zero!)

If you haven’t yet updated to ultrasn0w 0.9 then we highly suggest you do! So fire up cydia and update that puppy!

- source: blog,iphone-dev.org

The iPhone 3G will spark an entirely new way of purchasing iPhones and unlocking them. Apple will now be requiring you to activate your 3G iPhone in store and sign up a contract with AT&T (O2 in the UK) as of July 11th if you want to get the new low prices. Fortunately there will be an option to buy the iPhone for a pre-paid plan which won’t lock you into a contract with AT&T, the price of this iPhone has yet to be released. It appears unlockers will now have to pay a premium to unlock their phones.

Link Engadget.