Update #2: iPhone Dev Team has released an update for yellowsn0w, version 0.9.5 beta. So make sure you update!

Update: If you have success or failure on unlocking your iPhone 3G with yellowsn0w, report it to the iPhone Dev Team at report.yellowsn0w.com – Here

Finally! After months of waiting for an iPhone 3G Unlock it’s finally here. Yellowsn0w is available for Installer and Cydia. Yellowsn0w is exclusive for the 2.28.00 baseband. (The baseband provided with the firmware version 2.2 from Apple)

From iPhone Dev Team’s Blog:

BASICS

• The unlock works exclusively with baseband 02.28.00. This baseband is provided by the latest firmware update (2.2) from Apple. You’ll need to upgrade to this release using iTunes and then use QuickPwn to activate etc. There are plenty of tutorials about this on iclarified, bigboss, and other established tutorial sites. Because it works on 02.28.00, it is available to everyone on the planet. This means we don’t need to unnecessarily expose holes in earlier basebands, which is an important concern.
• The application is a small daemon that is launched on boot. It injects the payload at boot and also whenever there is a baseband reset. You won’t notice anything about it other than that your third-party sim now works. It’s a small program and unobtrusive. There is no GUI (this is by design).
• You can add the application using the sources outlined below (coming soon). There are Cydia and Installer sources available, so use whichever you are comfortable using.
• yellowsn0w is completely removable through Cydia, the command line, and iTunes.

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Been having trouble unlocking your iPhone 3G with yellowsn0w? Follow this guide!

Note: This IS beta software, there is no guarantee this will work. Use at your own risk!

First is first, Jailbreak your iPhone (If your iPhone is already jailbroken you may skip steps 1-7)

1. Install firmware 2.2 if you didn’t already (Download it from our iPhone Downloads section: Here
2. Download QuickPwn to jailbreak your iPhone 3G (Again, download it from our iPhone Downloads : Here for Mac
   Here for Windows
3. Pick the desired device, the iPhone 3G of course

Click Images to Enlarge

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Update #2: Looks like the yellowsn0w application will be in Cydia and it will only work for the 2.28.00 baseband – We were semi-correct about ignoring the post where they told us not to update the iPhone 3G to 2.2

Yellowsn0w will be available once the Dev Team member in charge of their Cydia repo wakes up and fixes the permissions.

01110110
01110100
01100001
01100010
01100101
01110010
00100000
00110110
00110001
00110000
00110110
00110000
00110001
00110111
00110100
00100000

If you decode the binary message, you get vtaber 61060174 if you decode that ROT13 message, you get IGNORE 61060174 — Now, what does IGNORE 61060174 mean? We believe it means to ignore their blog post #61060174 – This blog post – Yeah, remember that blog post from the iPhone Dev Team stating NOT to update your 3G to 2.2, because doing so will update your baseband and you’ll loose possibility of a 3G Unlock. Maybe they are secretly telling us that yellowsn0w will in fact work on all iPhone 3G basebands. Only time will tell.

Try it for yourself!
ROT13 Decoder used: rot13-encoder-decoder.waraxe.us Thanks Ecko!
Binary Decoder used: roubaixinteractive.com

- source: blog.iphone-dev.org

Update #2: The 3G unlock video is live

Direct link to yellowsn0w demo on Qik

We’ll keep you updated!

Today, iPhone Dev Team announced their iPhone 3G unlock, codenamed “yellowsn0w.” It’s completed and being packaged into a user-friendly application with the simplicity of Quickpwn. Yeah, you heard right. The dev team is targeting for a release date in New Year’s Eve 2008. This unlock is available to iPhone 3Gs with the 2.11.07 baseband or earlier, You were warned not to update. Your iPhone 3G will also require to be jailbroken.

We have been working hard on a few other things. The main one being the 3G unlock codenamed “yellowsn0w”. This is now completed and is currently being packaged into a user-friendly application with the simplicity that you see in QuickPwn or BootNeuter.

• The target release date for the unlock is New Year’s Eve 2008.
• This unlock method is available to iPhone 3Gs that have 2.11.07 baseband or earlier, we did warn you.
• The unlock requires a jailbroken 3G iPhone.

In addition, Apple pushed an update to Mac OS X users, 10.5.6. Lots of users who updated have been having trouble with DFU mode. iPhone Dev Team believes Apple didn’t do it on purpose but a bug in the kernel, is causing the problems.

Lots of users have been experiencing problems with the use of DFU mode after applying yesterday’s 10.5.6 system update.

We believe this behavior is due to a kernel bug not a specific countermeasure by Apple. Possible fixes are (try at your own risk!) -

1. Replace the following plugin kexts from within IOUSBFamily.kext with the ones from 10.5.5 and then rebuild kextcache (if you don’t understand this, then you shouldn’t attempt it!)

/System/Library/Extensions/IOUSBFamily.kext/Contents/PlugIns/AppleUSBHub.kext

/System/Library/Extensions/IOUSBFamily.kext/Contents/PlugIns/IOUSBCompositeDriver.kext

2. Use a USB hub in-between the DFU device and the Mac and insert/reinsert the iPhone’s USB cable.
3. Use a PwnageTool created .ipsw on Windows! Oh the irony!

Stay tuned for New Year’s Eve!!