We just got a little tip from a reader leaving us a comment that Airtel India is actually unlocking the iPhone 3G after the 12month contract ends (just as we heard before). We also have a little screenshot of the unlock screen here. So while, we wait for number portability and the iPhone 3GS to arrive in India, old iPhone owners can enjoy the freedom for now.
(A look at the iPhone 3G terms by Airtel confirms that their contract is for 12 months and not 24 as by AT&T in US)
(Thx ross geller)