[TUTORIAL] Jailbreak iPhone 3gs and Unlock

[1] We need redsn0w. Download from here.
We need too iOS 4.2.1 from here.

[2] Connect your iphone to computer and launch iTunes.

[3] Restore iPhone. Press SHIFT and when click "Restore" button. (For mac pres options and click "Restore button")

[4] Navigate and select iOS 4.2.1.(Where we downloaded).

[5] Once iTunes has finished restore open redsn0w.

[6] Click "Browse" button. And select iOS 4.2.1 firmware.

[7] Once the firmware has been verified click the Next button to continue.

[8] Redsn0w will now prepare for jailbreak. Just wait.

[9] Now select options you would like. (Select Cydia)

[10] Please plug iphone off. When click "Next" button.

[11] RedSn0w will now guide you through the steps to get into DFU mode. You can find more help with DFU mode.

[12] Your iPhone will now reboot.

[13] RedSn0w will then begin uploading the new RAM Disk and Kernel.

[14] Once this is complete you will be notified that RedSn0w is done. Click the Finish button. When your iPhone finishes rebooting (5 minutes or so) it will be jailbroken with Cydia on the SpringBoard.

IMPORTANT:
To use Redsn0w to help you boot back into your jailbroken device simply select Just boot tethered right now from the options window and click Next.