How to Jailbreak & Unlock your 2G 3G 2.0 iPhone & iPod Touch
iClarified have got some really great guides when it comes to hacking your iPhone. These guides will show you how to Jailbreak, activate and Unlock your 2.0 2G iPhone and how to Jailbreak and activate your 3G iPhone.
3G
How to Jailbreak and activate - Mac
How to Jailbreak and activate - Windows
2G
How to Jailbreak, activate and unlock - Mac
How to Jailbreak, activate and unlock - Windows
Things to note: These guides are for software version 2.0. Guides for version 1.1.4 can be found on the site but you’ll have to look.
If you’re planning on using your phone on it’s original / allowed network after hacking - such as a Pay as you go user on O2 - then make sure you activate through iTunes, otherwise you may find you have No service and end up having to Restore and start again.
Have fun! And remember there’s no easy way of bricking an iPhone, so if it all goes wrong, just restore.