In this tutorial video, we show you how to jailbreak Apple's latest device the iPhone 3G to start the process you need to do the following:
Download the jailbreak by the iPhone Dev Team found:
And the iPhone 3G firmware and how you do this is you plug your iPhone in and open iTunes select iPhone from the 'Devices' tab and click restore and follow the installer it will then download the '2.0 Software" once its completed open the Pwnage tool and it will automatically detect the ".IPSW"
PS: Make sure you unselect "Activate" in the general tab of the pwnage tool as this will make your phone not recieve any celluar signal and also another error that i run into all day was the 'cannot reboot in DFU mode" the fix to this is;
Open your username in finder where the 'Downloads, Music, Pictures etc' click library then select iTunes folder and make a new folder in that directory called 'Device Support' then try building your custom firmware and installing it via iTunes (Only if you run into the DFU error)