Before you can follow these instructions you must have a jailbroken iPhone and you must be on the 04.26.08 baseband(modem firmware). This means that you must be running the 3.0 firmware and have used PwnageTool or RedSn0w to jailbreak.

To find your firmware and modem firmware(baseband) versions you can follow this tutorial. If you are not on baseband version 04.26.08 then you need to follow one of these tutorials before unlocking: Mac, Windows

If you are on T-Mobile remember to turn off 3G before starting...

Step One
Press to launch Cydia Installer from your SpringBoard.

Step Two
Press to select the Manage tab at the bottom of the screen.

Step Three
Press to select the large Sources button

Step Four
Press the Edit button at the top right of the screen.

Step Five
Press the Add button at the top left of the screen.

Step Six
Enter http://repo666.ultrasn0w.com/ as the source url and press the Add Source button.

Step Seven
Once the source has been added press the large Return to Cydia button.

Step Eight
Press the Done button at the top right of the screen.

Step Nine
Press to select repo666.ultrasn0w.com from the list of user entered sources.

Step Ten
Press to select ultrasn0w from the list of packages

Step Eleven
Press the Install button at the top right of the screen.

Step Twelve
Press the Confirm button at the top right of the screen.

Step Thirteen
After installation completes successfully press the large Return to Cydia button.

Step Fourteen
Now press the Home button then power off and power on the iPhone. You do this by holding down the power button for 3 seconds then moving the power slider that appears to the right. Press the power button again to turn on the phone.

Step Fifteen
You should now be able to insert the SIM of your choice!