Yes, it's finally coming. In fact, it's here this holiday season. MuscleNerd from iPhone Dev has broadcasted a video recently (shot from an iPhone 2G) which demonstrates how the iPhone 3G software unlock would work.

The unlock would be available this New Years Eve, so if you are still thinking of getting a Jailbroken model for Christmas, then it would be best to actually hold on till January.

For those who want the exact details on the unlock, it can be installed using Cydia, the popular 3rd party App installer available for the iPhone and iPod Touch. The video currently shows the console version, but the final shipping package would have an automated installer.

All you need to install the unlock is a vulnerable baseband (2.11.07 right now) and you are done. You can now enjoy free roaming anywhere in the world with this new software unlock.