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iPhone Unlocked 2.0
The iPhone Dev Team has released PwnageTool 2.0. This jailbreaks iPhones/iPod Touches running firmware 2.0 to support non-App Store third-party application. The first-generation iPhones can also be unlocked, but the iPhone 3G cannot be unlocked or used with BootNeuter.

I tested this and the Pwanage Tool is flawless. Everything has worked for me so far and I provided an outline of what I did to get my iPhone 1st Gen unlocked and jailbroken with the 2.0 firmware.

Warning: Jailbreak / Unlock at your own risk. I will take no responsibility what so ever for what may occur before, during, after the Pwnaing process. I tried it myself and was successful. Please proceed with caution.

To Jailbreak and Unlock a first-generation iPhone:

  1. Upgraded to Itunes 7.7
  2. Download the Boot Loader ( bl39.bin and bl46.bin)
  3. Download the Pwnage Tool 2.0.1
  4. Open iTunes 7.7 and connected the iPhone. When the iPhone is detected iTunes will ask you to upgrade your firmware, select the download only and disconnect iPhone after the download starts.
  5. Open the Pwnage Tool
    1. Select expert mode
    2. Chose iPhone 1st Gen / iPod Touch
    3. Browse for the 2.o firmware
    4. Browse for the boot loader
    5. Further customize the third party installer, custom boot / dfu screen, etc and select build (Optional). This will create a custom ipws for you to restore your phone from in iTunes
    6. When the custom ipws file is created, the Pwanage Tool will instruct you on how to put your iPhone into dfu mod. Follow the on screen instruction , dock your phone, and close the Pwanage Tool.
    7. Once your phone is in dfu mode and docked, iTunes will not recognize your iPhone and will ask you to restore. Select “alt” and the restore button, browse for your the custom ipw file you created with the Pwanage Tool and sit back and relax.
    8. Once iTunes successfully restores your iPhone, it will reboot and bootneutral will opened automatically. First, it neutral the boot and then flashed the baseband.
    9. Your iPhone 1st Gen / iPod Touch is Jailbroken and Unlocked
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