First you will need cydia to download fuzzyband. When fuzzyband detects your modem version it will ask you to uprade. click on upgrade:
* your screen will say OS 2.2.1
Now start up iTunes and update to the latest 3.0.1
Extract the redsn0w zip file and start redsn0w.exe
Browse for the ipsw file and follow the directions.
After jailbreaking the phone, you need to unlock it with ultrasn0w.
Goto cydia -> manage -> sources -> edit -> add
return to cydia, hit done and select the new repo you just added.
Install ultrasn0w and follow instructions.
You are now unlocked!