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The iPhone Dev Team has done it again. Just last week I reported that you could now Jailbreak any iPhone to the new 3.0 iPhone firmware, meaning things like easy tethering, live streaming through Qik.com, and more. Tonight, the iPhone Dev Team has taken that one step further by completely unlocking any iPhone before the iPhone 3G S to work on any GSM cell phone network.

Set up is easy. Start by Jailbreaking your iPhone using redsn0w or the Pwnage Tool. Then, in Cydia or Icy, add the repository, repo666.ultrasn0w.com. Then search for “ultrasn0w”. Install it, reboot, and your phone will now work with any GSM network! It is reported that due to T-Mobile USA’s network compatibility, 3G speeds will not work on the phone, so it’s encouraged that users disable 3G before installing Ultrasn0w that might be on that network.

As of today, any iPhone previous to the 3G S no longer requires a contract on any service, and has full access to copy and paste, search, voice memos, and more, in addition to all the great tools a Jailbreak can provide. The unlock and Jailbreak does not yet work on the 3G S, and it is rumored that it may take awhile due to the new chipset on the new device. If you run into issues with your unlock, report them on the iPhone Dev Team blog, or here and I’ll be sure and report anything major.

Jealous that all your 3G S friends have video AND cut and paste on their iPhones? Envy no more. Just earlier today as those of us were out braving the Apple Store lines to get our new iPhones, the iPhone Dev Team released a new version of their iPhone Jailbreaking tool, Pwnage Tool that works with all iPhone versions except the 3G S. The tool works with the 3.0 software, and will enable your 3G and younger phones (even first generations) to run tools such as Qik, and give free tethering just by installing it.

Previously, limits to the iPhone Baseband prevented any versions of the iPhone above 1.2.1 from being Jailbroken. This prevented many important bugs from being updated, and most importantly, as of Wednesday kept users from accessing the copy and paste, voice memos, search functionality, and more that the 3.0 software update provided. Now, all traditional 3G and younger phones can have full access to that functionality.

The iPhone Dev Team is still working on finalizing updates to their replacement for “yellowsn0w”, which allowed the iPhone 1.2.1 software and younger to also be unlocked for all GSM carriers to use. The replacement is called “ultrasn0w”, and is supposed to unlock all released iPhone versions, including those after 1.2.1 which yellowsn0w would not work with. Put in laymans terms, when ultrasn0w is released, you will be able to use any iPhone, on any version of the iPhone software, on any supporting GSM carrier. The iPhone Dev team is supposed to be just around the corner from releasing the unlock tool which enables ultrasn0w for use on other Cell Phone networks. They have suggested you wait to Jailbreak your iPhone if you intend to unlock it as well under the 3.0 update.

The 3G S may still be far off from an unlock or Jailbreak. It is my understanding that Apple has introduced a chipset that makes this “impossible”, or very difficult at a minimum. So if you want streaming video and much more customization without the speed, along with the ability to switch contracts to any provider at any time, you may want to hold onto that old iPhone for a little longer.