Blackrain from Geohot that we were waiting for is officially out for windows now at Blackra1n.com, and this would jailbreak your iPod touch 3G or iPhone 3GS with ease. A mac version can be expected soon. The biggest cheer here is for the iPod touch 3G users since the 3GS users still have to wait for an ultrasn0w upgrade to switch carriers. But the goodness of Cydia is not bad to have 🙂 {Update: If you are upgrading the firmware using iTunes, Ultrasn0w might not work for you in future}.
The pwnage tool from Dev team currently supports firmware v3.1, though with some ifs and buts. Though pwnage 3.1.3 saves you the goodness of unlocking in some cases with your 3GS.
Update:
Steps to Jailbreak & unlock iPhone 3G/3GS OS 3.1.2 with blackra1n
Steps to Jailbreak iPhone 2G OS 3.1.2 with blackra1n & unlock with BootNeuter