2) Update to OS 3.0 from iTunes (which you have done already). Basically, just click on the phone's name on the left in iTunes, and choose "Update" (not "Restore"). iTunes will download a 235MB file named "iPhone1,2_3.0_7A341_Restore.ipsw" and upgrade the OS of the iPhone to 3.0.
4) Sync your iPhone once with iTunes, then shutdown iTunes and turn off the iPhone, but keep it connected to the PC via USB.
5) Run redsn0w.exe from the unzipped folder. Click "Browse" and point it to the firmware file "iPhone1,2_3.0_7A341_Restore.ipsw" located at "C:\Documents and Settings\YOURLOGIN\Application Data\Apple Computer\iTunes\iPhone Software Updates" (this is on XP,on Vista it is around C:\Users\YOURLOGIN\AppData\Roaming\Apple Computer\iTunes\, just search for .ipsw files if you cannot find it). Change YOURLOGIN to your windows account name. redsn0w will verify that the file is valid, and allow you to proceed further. Otherwise, you have picked the wrong file.
6) Proceed through redsn0w, just remember to NOT install "Icy" at this time (there are some issues with it). Just install "Cydia" only. The steps are something like this: http://www.iclarified.com/entry/index.php?enid=4301
7) Once you are done following the prompts from redsn0w (like hold power button for 3 seconds, hold power and home bottons together for 10 seconds and hold home button alone for 30 seconds), you will see the jailbreak process finish.
8) After the phone boots, open Cydia, go to "Manage" at the bottom, and then choose "Sources" from the middle. Click "Edit". Then "Edit" become "Done" and an "Add" button is available on the top left. Choose "Add". Enter the URL "http://repo666.ultrasn0w.com" (note that it is a "zero" not an "oh") and click "Add Source". You can see the steps decribed here : http://www.iclarified.com/entry/index.php?enid=4253
9) Click on the newly added Source, and you will see "ultrasn0w" as a package that can be installed. Install it, and restart the iPhone. It will pick up a Qtel signal after the reboot.
Note that nobody is responsible for any of this, except yourself ;)
Most importantly DO NOT UPDATE when Apple comes out with a new version to block the software unlock (something like OS version 3.0.1). If you want to upgrade, it should be done with a custom .ipsw file.
In fact, it is a bad idea even to update iTunes when you are using an unofficial phone.
1) Update iTunes to 8.2 (which you have already)
2) Update to OS 3.0 from iTunes (which you have done already). Basically, just click on the phone's name on the left in iTunes, and choose "Update" (not "Restore"). iTunes will download a 235MB file named "iPhone1,2_3.0_7A341_Restore.ipsw" and upgrade the OS of the iPhone to 3.0.
3) Download redsn0w 0.7.2. The locations are available at the bottom of the post http://blog.iphone-dev.org/post/126908912/redsn0w-in-june . Assuming you are on Windows, unzip the file somewhere.
4) Sync your iPhone once with iTunes, then shutdown iTunes and turn off the iPhone, but keep it connected to the PC via USB.
5) Run redsn0w.exe from the unzipped folder. Click "Browse" and point it to the firmware file "iPhone1,2_3.0_7A341_Restore.ipsw" located at "C:\Documents and Settings\YOURLOGIN\Application Data\Apple Computer\iTunes\iPhone Software Updates" (this is on XP,on Vista it is around C:\Users\YOURLOGIN\AppData\Roaming\Apple Computer\iTunes\, just search for .ipsw files if you cannot find it). Change YOURLOGIN to your windows account name. redsn0w will verify that the file is valid, and allow you to proceed further. Otherwise, you have picked the wrong file.
6) Proceed through redsn0w, just remember to NOT install "Icy" at this time (there are some issues with it). Just install "Cydia" only. The steps are something like this: http://www.iclarified.com/entry/index.php?enid=4301
7) Once you are done following the prompts from redsn0w (like hold power button for 3 seconds, hold power and home bottons together for 10 seconds and hold home button alone for 30 seconds), you will see the jailbreak process finish.
8) After the phone boots, open Cydia, go to "Manage" at the bottom, and then choose "Sources" from the middle. Click "Edit". Then "Edit" become "Done" and an "Add" button is available on the top left. Choose "Add". Enter the URL "http://repo666.ultrasn0w.com" (note that it is a "zero" not an "oh") and click "Add Source". You can see the steps decribed here : http://www.iclarified.com/entry/index.php?enid=4253
9) Click on the newly added Source, and you will see "ultrasn0w" as a package that can be installed. Install it, and restart the iPhone. It will pick up a Qtel signal after the reboot.
Note that nobody is responsible for any of this, except yourself ;)
Most importantly DO NOT UPDATE when Apple comes out with a new version to block the software unlock (something like OS version 3.0.1). If you want to upgrade, it should be done with a custom .ipsw file.
In fact, it is a bad idea even to update iTunes when you are using an unofficial phone.