So that it can work with any carrier:

iClarified - iPhone - How to Unlock the iPhone 3G

Steve

 

Engadget:

iPhone 3G unlock arrives at last, time to eat some yellowsn0w - Engadget

"Update: Unfortunately, it seems yellowsn0w might be living up to its beta status, with plenty of commenters and others across the interwebs reporting problems getting "unlocked" iPhone 3Gs to pick up their preferred carrier. As always, proceed with caution, and prepare some loose papers that need weighting just in case.

 

One PAYG done now, quite a simple procedure but with a challenge at the end, you need to play with a combination of resetting and airplane mode then throw in a huge dollop of patience.

 

I'd forgot that the dev team were releasing on New Years Eve. I'll have a read, but I thought if you had a newer baseband then the unlock would not work, perhaps they have addressed this, would be nice.

 

The unlock only works on the latest baseband. It's a little different this time, runs as a daemon.

 

Excellent news that it does work with 2.2 and the new baseband, well, until Apple releases an update (Probably on Monday when they release the all new Mac Mini, a 32 and 64GB iPhone 3G and 64GB iPod Touch, plus of course the all new iPhone Nano ) and squashes things.

I'm sitting here wondering what the unlock would do for me, and I'm not sure if it would be any benefit. I guess if I could find a plan from a carrier that provided decent data bandwidth and didn't care what device was used, then an unlock would release me from having to use Rogers or Fido. I've still got to check what my options with Rogers actually are in regards to the iPhone, but I'm waiting until after Macworld just in case anything new does pop up.