Ultrasn0w 0.92 Released To Unlock iPhone 3GS iOS 4 Baseband 04.26.08
Finally the iPhone Dev Team has released Ultrasn0w unlock for jailbroken iPhone 3GS on iOS 4. While the previously released unofficial blacksn0w RC2 can be used to unlock iPhone 3GS iOS 4 on baseband 05.11.07, this one works for iPhone 3GS iOS on baseband 04.26.08.
Both these unlocks work only in the case of older bootrom. If your iPhone is on baseband 05.12.01, then you will have to wait , as an unlock solution for this baseband is not yet available. First jailbreak your iPhone before going ahead with these steps:
How To Unlock iPhone 3GS iPhone OS 4
1. Launch Cydia on your jailbroken iPhone and touch on Manage.
2. Now touch Sources, and then tap Edit.
3. Tap Add, and enter http://ios4.ultrasn0w.org as a source. Hit Add Source.

4. Wait for Cydia to update your sources.
5. Once the updation is done, search for ‘Ultrasn0w 0.92′ in Cydia and install the application.

That’s it. This will automatically unlock your iPhone 3GS. After restarting your iPhone, you can use your device with any carrier.
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hey i tried adding this source on my 3gs 3.1.2 but nothing happened. when i go to cydia, it shows “?” sign on this source. please help
thx
Did you add http in front of the source?
Tried this but no luck stuck with phone searching for network.