You had to know it would happen, as with most locked down items, the more locks you put on it the more some people will want to pick them.
The gang from the Dev Team has finally found a way to unlock the iPhone 3G. This particular hack took quite a while as Apple dumped more security into the iPhone 3G and the 3G network is different than the 2G but in the end they won out.
The Dev Team is looking to distribute a package that will allow full unlocking of the 3G on December 31st.
Read more at Gizmodo.
While it took a little longer than the free iPhone EDGE unlock, it does sound like this is the real deal. The team is claiming a successful unlock-now the next step is to package it up in a user-friendly GUI app like Pwnage Tool.
The only catch is that it will work only with iPhone 3Gs with baseband version 2.11.07 or earlier, and it must be jailbroken.