A shop in Istanbul, Turkey has posted a video demonstration of how they perform a 'hardware unlock' on the iPhone 3G with OS 3.1.3.

The video shows ElektroPower performing a hardware teardown to reflash the Baseband to 04.26.

Source: iClarrified
iClarified - Apple News - Hardware Hack Allows Unlock of iPhone 3G on OS 3.1.3 [Video]