I don’t like any of the instructions out there. I’d say this is all you need..
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The d0miblog’s Official Guide to Jailbreak the iPhone 3G using redsn0w on Windows XP and up!
First off:
READ THE ENTIRE ARTICLE BEFORE ATTEMPTING ANYTHING!
D0MIBLOG, JDZITRO, D0M ARE NOT RESPONSIBLE FOR YOU BRICKING YOUR IPHONE!
Now on to some prep:
Download the 3.0 (not 3.0.1) iPhone firmware:
http://www.felixbruns.de/iPod/firmware/
Use the “iPhone / iPod Touch” drop down and find the 3.0 firmware. This will be about 235MB.
It’s an Apple Device Software Update File – “iPhone1,2_3.0_7A341_Restore.ipsw”
Download the redsn0w application:
http://torrents.thepiratebay.org/4989699/redsn0w-win_0.8.zip.4989699.TPB.torrent
You can get it many places, but this was fastest for me. You can read the text files that come with the exe or not. I don’t think they really matter.
Connect your iPhone to your compy with the USB. Let it sync. It’s a good idea to Update it from Apple to the 3.0.1 firmware available to fix that SMS hack they just had. Remember, the firmware file you downloaded for redsn0w is 3.0 and your phone’s installed firmware is 3.0.1. This is what we want.
While still connected to the PC, turn the phone OFF.
Aaaaaaaaaaaaand
- Run the redsn0w.exe
- Click Browse and open the iPhone 3.0 firmware. redsn0w will verify the file and continue on.
- Cydia and Icy are the two main respositories for cracked iTunes applications and developer apps. Icy is unstable and doesn’t work on a lot of phones so I recommend that you DO NOT INSTALL ICY. Check the box for Cydia and hit next.
- If you didn’t already, now is the time. While still connected to the PC, turn the phone OFF.
NOW… this is the hardest part of jailbreaking (if hard at all).
- Once you hit next after the “turn off your phone” dialogue, there are timed instructions on how to put your phone into Device Firmware Update (DFU) mode. This is a factory developer mode to really hack the iPhone firmware. In our case, the redsn0w way.
- You can “play” the dialogue box through and read the prompts to get the timing required. Once it finishes it will give a box saying “no device detected” and just go back to the “turn off your phone” dialogue.
- The instructions go like this:
1. (Time lapsed @ 00:00 sec) Hold down the power (top corner) button for 10 seconds.
2. (@ 00:10 sec) While still holding down the power button, press and hold the home button (the circle on the front face of the iPhone) for the next ten seconds. In other words: hold two buttons down simultaneously for 10 seconds.
3. (@ 00:20 sec) Keep holding the home button but let go of the top power button. You will hold this for ~30 seconds. I say approximate because if everything works, redsn0w will already go to work on your device before the 30 seconds is up. If you still hold it for the 30 seconds it will not hurt anything.
- If everything worked, sit back and watch the show! You’ll see a bunch of terminal text and a pineapple running. It’s great. Then your phone will restart on its own.
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**ERROR**
Didn’t work you say? Well you’re screwed. Your phone is now bricked.
No. 
On some versions of Winblows (most notably XP), when you enter DFU mode the OS will detect it as a brand new device and try to find the drivers for it as something else. This usually happens when you don’t have iTunes installed. iTunes has the necessary drivers to prevent this “bricking” event.
**Solution**
Give your PC a slap in the face and your phone a hard reset.
Do this by unplugging the phone and then press and hold the power and home buttons together. See the Apple logo like it’s starting up? You’re gonna be just fine. Go on back to “While still connected to the PC, turn the phone OFF.” ^^^ up there ^^
Don’t see an apple? hmmm…. ummm… you can try plugging in and doing a reset. Were you low on battery when you started? Your iTunes sync went ok? If you’re still having trouble, please call the Dev-Team who made redsn0w at (347) DEV-TEAM. They can point you in the right direction.
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Once the phone restarts you will see in your next available app space there is a new app called Cydia (the check box from before). Cydia is your App Store for jailbroken and open source applications for the iPhone. Take a look inside and have fun. BUT FIRST, take Cydia and find and install Winterboard. This will be your pal on your new adventure. I would also recommend “Hackulo.us” ;-D Both can be found with a simple search from Cydia.
*Note: Like the real App Store, some apps in Cydia are free and some are donate-and-install. Support the developers!
For more information on Cydia and redsn0w make a clicky to AppleiPhoneSchool.com or this guy.