I too will be selling my old 3G iPhone and would
like a little clarification. From reading redmondpie.com it looks like 4.2.1 is unlockable via ultrasnow correct? So what would be the benefits or disadvantages for upgrading it from 4.0.1? I heard the 3G runs faster on the newer firmware. Thanks I advance.
No, 4.2.1 is unlockable because it uses the 6.15 ipad bb hack. From there you can unlock via ultrasnow
Benefits vs. 4.0.1 = better performance on the 3G.
However, there are many caveats to the 6.15 unlock. I would read up on it at the dev team blog first. (see "Ultra recycle")
http://blog.iphone-dev.org/