The official ultrasn0w 0.93 unlock has been released by iPhone Dev Team for iPhone 3GS, it is capable of unlocking all iPhone 3GS and 3G from baseband 4.26 to 5.13.

How to: Jailbreak iPhone 3GS on iOS 4:

Step 1: Follow the complete guide posted here to jailbreak your iPhone 3GS usingPwnageTool bundles on iPhone firmware 4.0.

How to: Unlock iPhone 3GS Baseband on iOS 4:
Step 2: Once you are done with the jailbreak, you can now unlock your iPhone 3GS running  iOS 4.0 firmware by using ultrasn0w 0.93 from Cydia. To do this:

• Start “Cydia” on your iPhone.
• Touch on “Manage” tab on the bottom.
• Now touch on “Sources” as seen in the screenshot below:

• Touch on “Edit” and then on “Add”. You will be prompted to enter a url source as seen in the screenshot below. Type “http://repo666.ultrasn0w.com” and touch on“Add Source”.

Cydia will now automatically update your sources by following a series of automated steps.

• After installation is completed. Search for “ultrasn0w 0.93” in Cydia and install the application. This app will automatically unlock your iPhone 3GS so that you can use it with any carrier.

Step 3: Now simply restart your iPhone and voila! you should now have a fully unlocked iPhone 3GS, on iOS 4.