UPDATE: Follow the new Redsn0w method.The below one was applicable till official unlock was not released by DevTeam.
After playing around for 6 hours with all possible combinations possible, I finally found what would actually unlock and activate iPhone 2G under OS 3.0 GM (the final release).
This method works for all types of upgrades to 3.0 7A341 & GM. i.e. from 2.x to 3.0, 1.1.x to 3.0 7A341 or GM
– Install iTunes 8.2
– Change date to something after “17th june”.
– Go into DFU mode.
– Restore to 2.0.2 (get it here).
– Jailbreak with Quickpwn RC3 (windows) available here
– go offline (iTunes should NOT be able to reach internet)
– Update to 3.0 (do not use “Restore”)
After upgrade is complete, iPhone is unlocked and activated, you can now sync with iTunes and go online 🙂