UPDATE : Custom Firmware comes to the rescue.
Apple sneaked in a worthless firmware update (2.2.1) to thwart the attempts of Dev Team to unlock the iPhone 3G via software means. Please stay away from the update till a patched firmware without the baseband update is released. I repeat, baseband cannot be downgraded and since Apple patched the baseband exploit, 2.30.03 which comes as a surprise with 2.2.1 is not unlockable by any means at this time. Save yourself some headaches and enjoy your iPhone as you are till yesterday! Any …