Today GeoHot released Blackra1n RC3 which includes BlackSn0w. Blacksn0w it’s equivalent to ultrasn0w, which means it unlocks your iPhone, but it works on the latest 05.11.07 baseband.
Now you can install BlackSn0w via Cydia as well. All you have to do is to add the source: www.blackra1n.com . This only works for the iPhone 3G and 3Gs. If you have an iPhone 2G/EDGE you will have to use BootNeuter. Read here.