Hacking-happy users of iPhone 3G and 3GS models can now unlock their phones to work with other carriers, thanks to a new hack. The iPhone Dev Team released this weekend a new carrier unlock for the older iPhone models, which allows you to use any SIM card with the latest software update from Apple, iOS 4.2.1.
Jailbreaking or hacking your iPhone was deemed legal by the U.S. Copyright Office this summer, so this method is not likely to land you in any legal trouble. Apple however is snubbing the practice, and besides making hacking more difficult, it won't repair your phone for free even it's under warranty.
With disclaimers out of the way, this new iOS 4.2.1 redsn0w hack works with 3G and 3GS iPhone models (so far), allowing you to use, say, a T-Mobile SIM with your US phone, instead of AT&T. This is be handy if you travel abroad and wish to avoid high roaming charges by using a local prepaid SIM instead.
The hackers managed to come up with this workaround by borrowing the baseband 3G chip firmware from the iPad (which comes without a carrier lock), and integrating it with iOS 4.2.1 for iPhone 3G and 3GS. Unlocking tools are available for both Windows and Mac OSX users, and your iPhone 3GS or iPhone 3G must already be jailbroken.
The downside of this hack is that if you unlock your iPhone this way, there is no way to restore your iPhone to its original state. This means that if something goes wrong with it, and you take it to Apple for repairs, they will be able to tell that you have been tinkering with your phone. You warranty, of course, will be void, and repairs can be costly.
An unlock hack for iPhone 4 users with iOS 4.2.1 is expected sometime later this year. A jailbreak for iOS 4.2.1 has already been released.