The jailbreak for the iPhone 3GS is here and it’s awesome.  

You have to thank George Hotz for PURPLERA1N, the iPHONE 3G S JAILBREAK…. for both Windows and Mac OS

This is what you need to do:

• Go to purplera1n.com and download the current version.
• Save the .exe file on your desktop.
• Double click the saved file and then click on the “make it rain” button.
• Your iPhone will go to recovery mode.
• Purplera1n will run, and will then reboot your device.
• Once reboot, look for a new application icon on the SpringBoard named “FREEZE”.
• Click on “FREEZE” to launch it.
• FREEZE will open up, now click on the Install CYDIA button at the bottom. 
• The CYDIA installation process will download CYDIA.
• When the status change to FINISHED, reboot your iPhone.
• After you have rebooted your iPhone, launch CYDIA to run all the necessary updates.
• For your convenience check out the graphical steps below:

As usual, make sure you back up your data before you jailbreak.  Do it at your own risk!

However once you have done the jailbreak you still need to unlock your phone to accept any SIM card.  Follow the following instructions:

HOW TO UNLOCK YOUR iPHONE

• Launch the CYDIA Application from your iPhone springboard.
• Click on the “MANAGE” tab at the bottom of the Home-Cydia screen.
• Once on the MANAGE section of Cydia, click on “SOURCES” tab.
• Then press the “EDIT” button followed by the “ADD” button.
• The screen will show a text box where you have to enter the Cydia/APT URL.
• Enter http://repo666.ultrasn0w.com/ as the URL and press the “ADD SOURCE” button.
• Once this is done, press the “RETURN TO CYDIA” button.
• On the next screen, press the “DONE” button.
• Select the “repo666.ultrasn0w.com” displayed under the heading “ENTERED BY USER”.
• Next press to select ultrasn0w application displayed under the “Sources: repo.666.ultrasn0w.com” 
• Press the INSTALL button and then press the CONFIRM button to install the application.
• Once completed, Click the Return to Cydia button.
• Take note of the following steps to complete the process:
  • Press the Home button for about 3 secs to power OFF and then press the  power button ON your iPhone.
  • Move the slider to the right to power OFF your iPhone.
  • Continue to press the Home button and also press the Power button again to power ON your iPhone.
• Your iPhone is now unlocked to accept any SIM card. 
• CONGRATULATIONS!