Msft.guy has released PwnageTool bundle to jailbreak iOS 4.1 on iPhone 3G with the lastest version of PwnageTool. Unlike Redsn0w 0.9.6, it'll be a hactivated and untethered jailbreak. Jailbreaking your iPhone 3G on iOS 4.1 with Redsn0w 0.9.6 will upgrade your baseband to 05.14.02 which is yet to be unlocked with Ultrasn0w.
This PwnageTool bundle will preserve your current baseband so that you can unlock your iPhone with Ultrasn0w. Like most of the PwnageTool bundles, this jailbreak won't crash your Cydia. I have tested it myself on my iPhone 3G and have not faced any issues yet.
Update via msft.guy:
Steps to Patch PwnageTool with PwnageTool Bundle to Jailbreak iOS 4.1 on iPhone 3G:
*Find the download links at the end of the post
- *Download PwnageTool 4.01
- *Download PwnageTool bundle for iOS 4.1 (iPhone 3G)
- *Download stock iOS 4.1 IPSW for iPhone 3G
- Place PwnageTool, iPhone1,2_4.1_8B117.bundle and stock iOS 4.2 Beta 2 IPSW (iPhone1,2_4.1_8B117_Restore.ipsw) file for iPhone 3G in one folder.
- Right click on PwnageTool and choose Show Package Contents as shown in the screenshot below.
- Navigate to Content->Resources->FirmwareBundles and drag iPhone1,2_4.1_8B117.bundle to this folder.
- Now your PwnageTool is patched and ready to jailbreak iOS 4.1 on your iPhone 3G. Rest of the jailbreaking steps are similar to iOS 4.2 Beta jailbreak with PwnageTool bundle which you can find here.