I am currently in Wenzhou, China and using a factory unlocked 3GS on a pre-paid China Mobile SIM with 200mb of data at 20RMB per month. I have had no problems except for the purplerain jailbreak (it seems to interfere at times with both edge and WI-FI internet connections). Also, I have mine set up to do both MMS and tethering
I had an AT&T iPhone 3G that I used for several months with no carrier problems. I jailbroke and software unlocked it and just put my pre-paid SIM in with no problems.
The biggest problem I had with using a SIM proxy card (Gevey 3G, Rebel SIM, etc.) is that GPS does NOT work, but it does work fine with the software unlock.
If you have any more questions PM me and I'll see what I can do to answer them.
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Recently (as of one month ago), China Unicom has just launched their WCDMA (3G) service. I immediately subscribed, and have been successfully enjoying very fast 3G service all over China on my iPhone 3GS. I highly recommend going with China Unicom WCDMA service.
Let me know if you have any questions.
By the way, China Unicom 3G service is post paid.
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jkfox121: How much is that service per month and how long is the contract for?