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Note: Make sure you have taken a back-up of your iPhone before you upgrade. There are a few known issues with the 3.0 beta – 1. Maps doesn’t work for some people, 2. Syncing takes a lot of time, 3. lots of UI issues with 3rd party apps…  

Steps to upgrade:

1. Sign up as an iPhone developer on http://developer.apple.com/ (you need to pay 99$/year for registration fees)

2. Apple takes about 24 hours to upgrade your status. Once done you will receive an activation code in  your email.

3. Download the iPhone SDK and iPhone OS 3.0 DMG files from their website.

4. Install the iPhone SDK. Run X-Code and find organizer window.

5. Plug in your iPhone and it should be detected in the in the organizer window. 

6. Open the iPhone OS 3.0 DMG file with IPSW image.

7. Click on your iPhone detected in the organizer window.

8. Click on the label which displays the current software version of the iPhone. Select other version and browse to the new DMG with IPSW image.

9. Press Restore. Once the upgrade is done, iPhone will automatically reboot and appear in iTunes.

http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=284815942&mt=8

iPhone-dev team released the QuickPwn2.1 tool for windows last week which works like a breeze and the UI makes it extremely simple to use. It unlocks iPhone 2G and jailbreaks iPhone 3G.

Surprisingly, the new 2.1 firmware upgrade doesn’t re-lock the iPhone. So, if you have an already unlocked/jailbroken iPhone running 2.0 or 2.0.x, just go ahead and upgrade using itunes 8 – it wont lock your phone again. (tested on 2.0, 2.0.1, 2.0.2)

more from the dev-teams blog:

Window QuickPwn 2.1

Supports 2.1 firmware with the unlocking and jailbreaking of iPhone 1st generation (2G) device. Supports the jailbreaking of iPod Touch 1st generation device and iPhone 3G. Your device will need to be upgraded to 2.1 (using iTunes 8 ) before running this application.

• It does NOT support the unlocking of iPhone 3G
• It does NOT support the jailbreaking of second generation iPod Touch introduced last week

• Windows QuickPwn 2.1 - Torrent here
• (SHA1) QuickPwn21-1.zip = f8124d0e8f31f64ef3272de8fbc679e1dd1f93a7

You will need to know how to use bittorrent to download this file.

Mirror owners should email blog@iphone-dev.com with direct hosted zipfile links (with the correct MIME type). RapidShare or other file distribution services are not needed thanks. Links will be added to this post soon.