O.K. This is not my usual repertoire but I detested retyping this every time someone would ask me for instructions. If you have/want an iPhone but don't like AT&T's service plan. Do the following. Or if you want to add a wallpaper to you iPhone which Apple doesn't permit oddly enough, also, follow these instructions.
If you don't care, I don't blame you. If you have an iPhone and were afraid to do it before
*Disclaimer. I am in no way suggesting that you do this. If you choose for reasons of your own to do this you are on your own. I know it works.
First of all, update your iPhone to 3.0 using iTunes. Whatever you do though, do NOT update to 3.1.
Download whichever file applies to your phone.
iPhone 3Gs 3.0
iPhone 3G 3.0
iPhone 2G 3.0
Download redsn0w from one of the following locations.
Run redsn0w, point to the ipsw file you located and follow the instructions carefully. Just to prepare you, you will have only a few seconds to do the following.
1. Hold the power button.
2. Without letting go of the power, press the home button and hold.
3. Without letting go of the home button release the power button and wait.
If it doesn't work no worries, try again.
Once it is done, run Cydia or Icy and add custom repository repo666.ultrasn0w.com.
Then search for ultrasn0w.
After you install it reboot. Note: If you are on T-Mobile be sure to disable 3G. Sorry, there doesn't appear to be any solution for that.
If you install both Cydia and Icy and for some reason can't install any app. Try re-jailbreaking but don't select Icy. It will still be there and should work once you boot up again.
100% of the credit goes to the iPhone Dev Team. I just put it simply and into one location.