The original iPhone was unlocked for use with any phone service shortly after it was released. All iPhones purchased through Apple are designed to work only with AT&T as the wireless service provider. Once a phone is unlocked, it can be used with other service providers. A group called the iPhone Dev Team has successfully unlocked the iPhone 3G and plans to release free software for others to unlock their iPhone 3Gs.
Unlocked Before Release?
The iPhone Dev Team unlocked the new iPhone 3G before it was officially released. They were able to do so because the iPhone 2.0 firmware was released in beta months before. They had already unlocked that software.Gizmodo: iPhone 2.0 Unlocked, Runs All Apps (March 12, 2008)
Still Waiting for 3G Unlock
The iPhone Dev Team released a tool to unlock and jailbreak iPhones running the iPhone 2.0 firmware.The Unofficial Apple Weblog: Pwnage 2.0 Released(July 19, 2008) The initial release only unlocks original iPhones upgraded to 2.0. The Dev Team is still working on a iPhone 3G unlocking tool.Gizmodo: First iPhone 2.0 Pwnage Tool Will Not Unlock iPhone 3G, says Dev Team (July 15, 2008)