There is good news for iPhone 3G users who accidentally updated to OS 3.1.3 and lost their blacksn0w/ultransn0w unlock. As we already know that OS 3.1.3 updates baseband to version 05.12.01, and at this moment this version of baseband is locked. But iPhone 3G users can downgrade their baseband from 05.12.01 to 4.26.08 with the help of FuzzyBand, and you can use ultransn0w to achieve Network unlock.
Unfortunately, not all iPhone 3G users can downgrade their baseband, FuzzyBand will only downgrade baseband of this 3G’z which have the bootloader version 5.8. So just try your luck and see if it works or not. The bootloader version is firmware independent and is determined by the manufacturing date of your iPhone 3G. Once downgraded, you can look for Blackra1n RC2 on Cydia and unlock the 3G.
FuzzyBand will not work with iPhone 3GS.
FuzzyBand automatically detects the bootloader version and downgrades the baseband.
FuzzyBand is available on cydia under BigBoss repo for free.
UPDATE: You can use the updated Ultrasn0w from cydia to unlock iPhone 3G / 3GS – running OS 3.1.3 (All basebands). read here
Update: How to Jailbreak + unlock iPhone 3G running OS 4.0