The following instructions will only help downgrade iPhone 3G which is currently on iPhone OS 3.1.3 with 05.12.01 baseband and older bootloader 05.08. This wont perform with iphone 3GS. In case your apple iphone meets the above standards, you possibly can then use the latest model of Fuzzyband (set up cydia immediately after jailbreak) which supports apple iphone 3.1.3 to downgrade your 05.12.01 baseband to the older 04.26.08 even should you accidently upgraded for the stock iphone OS 3.1.3 from iTunes. As soon as you have downgraded your baseband, you possibly can then use ultrasn0w to unlock your iphone on iphone 3.1.3 firmware.
1) Jailbreak your apple iphone 3G 1st
2) Once your iphone is jailbroken install cydia and Fuzzyband
3) You need to now be capable of correctly unlock your apple iphone 3G using the latest version of ultrasn0w
Tips on how to Install Ultrasn0w From Cydia
1) Launch Cydia or Icy
2) You ought to see Two Options Packages and Source.
3) Go to Packages -> Edit -> Add & Enter repo666.ultrasn0w.com URL as a repository URL.
4) Now Go back to Your Cydia Sources menu and make certain you see the Ultrasn0w package
The way to install Fuzzyband
1) Immediately after you have jailbroken your iphone, Go to “Cydia” on your iphone and Search for “Fuzzyband” and then install this application.
2) Start “Fuzzyband” app and touch on “Downgrade” button to downgrade your Baseband from 05.12.01 to 04.26.08.
NOTE: For those of you who dont know your bootloader, simply run Fuzzyband and it will report the edition number for you.

DEV-TEAM released ultrasn0w. All problems solved. Thank you DEV-TEAM!