I was just checking iPhone related videos on Youtube and there I found video which demonstrates hardware unlock for iPhone 3.1.3 on baseband 05.12.01. These guys are from Turkey and have managed to successfully unlock an iPhone 3G via a hardware flash, Though not sure if they can unlock 3GS or not. Their video shows the whole process of restoring baseband back to baseband 04.26.08. This process is too complicated and I’m not sure if everyone can unlock their locked phones by their process.
But its still good news ! Atleast there is a way to unlock baseband 05.12.01. It would be great if they or someone else comes up with a simple way to unlock an iPhone rather doing such complicated surgery.