If you are running Iphone  firmware 3.0 with the Ultrasn0w software unlock, DO NOT upgrade to the announced firmware update 3.1
Upgrading will most likely disable the unlock.

I took the plunge and upgraded my Iphone firmware to V3.0 last night. I have not checked out the new features as of yet, keep tuned for more

Here's how to upgrade, jailbreak and unlock v3.0

Sync- make sure you sync your Iphone, as the 3.0 firmware will delete all the data and apps on your phone. After the upgrade you can re-sync the data and apps back to the Iphone.
Note: Apps added with Cydia or Installer will need to be reinstalled manually.

Download- You will need the following
Itunes 8.2
Iphone V3.0 Firmware (download through Itunes 8.2)
redsn0w (available at blog.iphone-dev.org)

Install- You will be prompted to install the V3.0 update, click on update and wait for the process to complete.

While you are waiting, install redsn0w (the 3.0 jailbreak) by Extracting redsn0w-win_0.7 to C:\

Jailbreak- Once your phone has been updated; it's time for the Jailbreak. Locate the 3.0 firmware update; the updates are stored in C:\Documents and Settings\Username\Application Data\Apple Computer\iTunes\iPhone Software Updates. Copy the file to c:\redsn0w-win_0.7\
Take the firmware file and drop it onto redsn0w.exe
Check the boxes to install CYDIA and ICY.
Wait for a message to come up saying please connect your iPhone into DFU mode. Then connect your iPhone to the computer if you haven’t already done so, and hold down
the Power and Home buttons for 10 sec. (If the apple screen comes up you have gone too far)
Then let go of the Power but keep holding onto the Home button. Hold it for at least 30 sec or until it reconnects to the computer.
Go to the Command Prompt window (from the start menu, select run and type cmd and and press enter.) When the command window comes up, press enter.

Unlock- now that you have updated your firmware and jailbroke your phone, it’s time for the Unlock.
Run Cydia or Icy
add the repo repo666.ultrasn0w.com to Cydia or icy
Search for ‘ultrasn0w’ in cydia or ICY and install, then reboot the Iphone.

Final Steps- Now that the IPHONE is updated, jailbroken and unlocked, it’s time to resync the phone to Itunes. You may want to review the sync options in Itunes to insure your apps and data will be synced the way you'd like.
After Syncing your data and apps back to the Iphone, check the APP Store application for updates, as many apps have been updated to work with 3.0.
If you had any Cydia applications, you can reinstall them using Cydia or ICY.
Finally, enjoy!

Now that you are unlocked, you may want to tether your Iphone, also be sure to checkout my updated list of top apps for iphone 3.0

The release of Ultrasn0w, the software unlock for firmware v3.0, has been delayed. There is currently an issue with the unlock that disables the YouTube application. The Dev-Team are working on resolving the issues and hope to have it released soon.
redsn0w, which is currently out, provides a jailbreak for the new firmware and will include the Ultrasn0w unlock tool when it is released.
Before making any changes to your Iphone, I recommend reading the golden rules from the dev-team site.

1. GOLDEN RULE: If you are using a 3G iPhone with yellowsn0w and rely on yellowsn0w to obtain cellular service, then you should NOT use redsn0w right now. Ultrasn0w (the 3G carrier unlock) is not included with this release and therefore your baseband will be locked and unable to use an operator other than the official one it was bought for. UltraSn0w will be released via APT (cydia and icy) soon. If you have an original iPhone (1st generation) then 3.0 carrier unlock works with this redsn0w release.
2. Yellowsn0w in its current form will NOT work with the baseband version that is present in the 3.0 update, you will need Ultrasn0w, which will be released sometime soon, Ultrasn0w will work with all iPhone 3G models (but not 3GS), even ones that were previously unlockable, Ultrasn0w (when available) will be released via APT (this means you will be able to get it via Cydia or Icy).
3. Please read all parts of this post before downloading and using these tools.
4. Read items 1, 2 and 3 again and again.
5. At the bottom of this post are the bittorrent files for the latest version of redsn0w.
6. This app is suitable for the recent 3.0 release
7. redsn0w will NOT work for the iPhone 3GS.
8. redsn0w WILL work for Original iPhone (1st Generation), Original iPod touch, iPod touch 2G and the iPhone 3G (not the iPhone 3GS).

To use redsn0w simply upgrade the device in iTunes to firmware version 3.0 and run redsn0w to activate and jailbreak the device (and if you are using an original iPhone 2G, it will unlock it too!)