From ModMyiFone - Wiki
This guide will teach you how to unlock an iPhone which is brand new out of the box and has the 1.1.1 software. Any iPhone purchased mid October and mid November of 2007 is most likely running 1.1.1.
If you have a 1.0.2 phone which has never been unlocked, you can upgrade it using iTunes and follow this guide. If you have a 1.0.2 iPhone which HAS been unlocked using any method other than iPhoneSIMFree, you can follow the virginizing method and then upgrade to 1.1.1, and THEN continue with this guide. All right, assuming you meet those criteria, lets go.
Step 1. - Jailbreak.
Make sure your iPhone is turned on, and NOT connected to your computer. Make sure you have a SIM-card with PIN turned off (the supplied AT&T card works fine, or a T-Mobile USA SIM, anything is fine) IN the iPhone. You can use the new SIM you will be using if you are unlocking, or you can simply leave the AT&T one in there.
Slide to the emergency dial screen
Type *#307# and then press Call.
When your iPhone starts ringing, press the X button in the top right to delete the string of characters you just called, then type 0 and hit call. It will start ringing again, hit Answer.
Press Hold' , and when your phone starts ringing again, press Decline. This should bring up the main dialer. Good.
Press Contacts from the bar running across the bottom of the screen, then hit the plus sign in the top right to add a contact.
You can put whatever name in you'd like, but I just put ours. :D Then hit Save.
Click Add new URL,
and enter the following in the URL field:
prefs://1F
Hit Save, and when it goes back to the Contact screen, click Add a new URL again.
Put the address in as:
http://jailbreakme.com
And hit Save.
Now hit Save again.
All right. Now, click the first home page button, the one pointing to prefs://1F.
This will take you into the Setting menu. Hit the WiFi button, and choose your network, and put in your password if you need to.
Now, restart your iPhone and go back to the Slide for emergency dial screen.
Once again, type *#307# and then press Call.
When your iPhone starts ringing, press the X button in the top right to delete the string of characters you just called, then type 0 and hit call. It will start ringing again, hit Answer.
Press Hold , and when your phone starts ringing again, press Decline.
Tap the ModMyiFone.com contact (or whatever you named it), and this time hit the home http://jailbreakme.com button.
This will open the AppSnapp installer page in Safari. Scroll down all the way to the bottom where it says Install AppSnapp.
You will be kicked out of the Safari screen, and within 30 seconds or so, the iPhone will restart.
NOTE: If your iPhone does not restart within 90 seconds or so, you will have to repeat the http://jailbreakme.com steps (restart iPhone, dial to get to Contacts, and launch http://jailbreakme.com URL) until it does. Generally this happens right away, but it can take quite a few tries. Keep trying, it will take eventually.
Congrats!
You are now running an Activated and Jailbroken (you can mod and have file system access is all that means!) iPhone with Installer.app installed!
You can now unlock your iPhone using this easy method!
