3G is always untethered. Baseband and firmware are not the same at all. Firmware = 3.1.2
Baseband = 05.11.07
Jailbreaking is based on Firmware.
Unlocking is based on Baseband.
What is the purpose for going to iOS4? Although some people need is for certain apps, 4.0 and above runs ALOT slower than 3.1.3. You will lose the smoothness and take a significant performance hit. If any of the FW though, 4.2.1 is the smoothest for the 3G.
Basically wanting an unlock + 4.2.1, you will sacrifice a few things:
- Lose GPS
- Potential "push notification" problems
- You will not be able to restore to stock
Read all about it here:
http://blog.iphone-dev.org/
Tutorial if you still want to:
http://www.iclarified.com/entry/index.php?enid=12947
**Make sure to read and understand everything before attempting...as there's no coming back from the ipad baseband hack. You're still in a good place in terms of Baseband, so choose wisely ^^