How to Unlock iPhone 3GS on iOS 4.1 with Ultrasn0w [Guide]

The newly released iOS 4.1 for iPhone

4, 3GS, and 3G features new baseband which is currently not unlockable using the current version of ultrasn0w. But if you upgrade (while preserving baseband) and then jailbreak iPhone 3GS on iOS 4.1 using PwnageTool method posted here, you can unlock your phone (iPhone 3GS) using the existing version of ultrasn0w. Also, if you upgrade your iPhone 4 (while preserving baseband) on iOS 4.1 using the method posted here, you will be able to unlock your phone (iPhone 4) as soon as the new jailbreak tool is available for download.
So technically, you can currently unlock any jailbroken iPhone 3GS on iOS 4.1 as long as it has old bootrom using the steps posted below.
How to: Jailbreak iPhone 3GS (old bootrom) on iOS 4.1:
Step 1: Unlocking requires that your phone is jailbroken on the latest firmware. Follow the complete guide posted here to jailbreak your iPhone 3GS (old bootrom only) on iOS 4.1 using PwnageTool.
How to: Unlock iPhone 3GS (old bootrom) on iOS 4.1:
Step 2: Once you are done with the jailbreak, you can now unlock your iPhone on the older baseband using Ultrasn0w 1.1-1 from Cydia. To do this:

• Start “Cydia” on your iPhone.
  
• Touch on “Manage” tab on the bottom.
  
• Now touch on “Sources” as seen in the screenshot below:
  

• Touch on “Edit” and then on “Add”. You will be prompted to enter a url source as seen in the screenshot below. Type “http://repo666.ultrasn0w.com” and touch on“Add Source” to add this repo if you haven’t already.

Cydia will now automatically update your sources by following a series of automated steps.

• After installation is completed. Search for “ultrasn0w 1.1-1” in Cydia and install this application. This app will automatically unlock your iPhone so that you can use it with any carrier.

Step 3: Now simply restart your iPhone and voila! you should now have a fully unlocked iPhone !
Disclaimer: This guide is for testing & educational purposes only. I’m not responsible for any loss of important data or malfunctioning of your iPhone

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Link from:  http://www.redmondpie.com/unlock-ios-4.1-with-ultrasn0w-how-to-guide/