The iPhone Dev Team keeps there promise, as they released an update to the UltraSn0w package to allow an unlock for iOS 5. This new update (1.2.4) allows users with unlockable basebands running iOS 5 to unlock their iPhone 3GS or iPhone 4.
If you are running basebands 4.26.08, 05.11.07, 05.12.01, 05.13.04, or 06.15.00 on the iPhone 3GS, or baseband 01.59.00 on the iPhone 4, then you can unlock your device right now with UltraSn0w 1.2.4 by following the steps below (either video or text under the video).
Jailbreak your iPhone using RedSn0w.
Boot up Cydia and search for UltraSn0w. If it is not there, add this repo: http://repo666.ultrasn0w.com/ and then try searching again.
Download and install UltraSn0w 1.2.4 from Cydia.
You are unlocked! Test it out by using another SIM card.
Notes from the Dev Team:
Note: there’s a special “trick” that iPhone3GS owners with baseband 06.15 need for iOS5. During the new setup screens you see when you start iOS5 for the first time, you’ll be asked about Location Services. Be sure to select “Disable Location Services” when asked! Later on in the setup, you’ll have the chance to turn on Location Services again when asked if you want to use “Find my iPhone”. It’s fine to turn it back on at that point, if that’s your desire (or you can always go in and enable it in Settings.app).
Also, some iPhone3GS users with the 06.15 baseband may have tried to install iOS5 using a stock IPSW (even though you should never ever try to use a stock IPSW if you’re an ultrasn0w unlocker). If you did try this, your baseband is probably in an inconsistent state, and you’ll need to reflash the 06.15 baseband again (using redsn0w). Be very careful if you use redsn0w to reflash the iPad baseband — don’t interrupt the process! And please avoid using stock IPSWs in the future 🙂 Unlockers should never go near stock IPSWs.