Did I inadvertently re-lock my iPhone 3G?

I bought an iPhone 3G on eBay that was supposedly unlocked. After I got it, I put in my sim card, made a call with it, and since it all seemed hunky-dory, I took the card back out, and waited two weeks until Christmas to give it to my daughter as a present. Then, since it had been a couple weeks, I plugged it into my Mac to recharge the battery, put in her sim card, and now the phone just keeps searching and searching looking for a signal. (Also when I try to import the contacts from the sim card, it blinks for a second, but doesn't import.) I also took the sim card out of my son's phone and tried that in the phone. It had the same problems (searching for a signal, couldn't import contacts). By attaching the phone to the Mac, did I somehow re-lock the phone? The phone has Cydia installed, not that I know what that does, other than imply it was jailbroken. I brought it to the T-Mobile store (that's my carrier), but the guy there wasn't too familiar with iphones and couldn't help, and I brought it to the apple store, and they couldn't help because they said it's been jailbroken. What do I do?

 

Version 4.2.1 (8C148)
Modem Firmware 05.15.04

 

1. I assume US, since the seller was in Cleveland.
2. I can get wi-fi from my home if that's what you mean
3. Do I download it from the internet on my phone, or do I download it on my computer, and hook up my phone to it? If the latter, does it matter if I use my Mac or PC? I'd rather use my PC just because I'm usually extra-cautious not to screw up my Mac which would put me out of business for awhile, although it's faster than my PC.

 

Now things seem even worse.
1. I downloaded both things, hit "run" for redsn0w
2. browsed it to iPhone 1,2_4.2.1_8C148_Restore (this was the file I downloaded for my iPhone 3G)
3. hit next and the computer did a bunch of things
4. clicked on Install iPad baseband (Install Cydia and Enable battery percentage were also checked) and hit next
5. made sure the phone was turned off and plugged in and hit next
6. followed the directions of holding down the power button and other button
7. then the screen said "Fetching iPad baseband files (please be patient)"
and then it disappeared. That was awhile ago - at least 15-20 minutes, with no indication anything is happening. Now what?

By the way, after going into www.iclarified.com, where do I go? I saw alot of choices for unlocking or untethering (What is untethering?) an iphone 3gs, but not an iphone 3g. Is the process different?

(And the reason it's worse is that now the phone won't even turn on)