The iPhone Dev Team has posted a video showing their recent progress with the iPhone 3G. They have hacked their way in to the PMB8878 baseband processor, which gives them unrestricted access to the iPhone 3G hardware - and, you guessed it, the means to unlock the phone for use on any carrier.

Of course, the unlock isn't here yet, but it's clearly only a matter of time.

Via iPhone Dev Team.

3G Baseband Tool from iphonedev on Vimeo.