The only way to unlock that would be to use the new ipad baseband update method. It has a few drawbacks so you may want to read about it first: Dev-Team Blog
Yes this works for 3GS. You can use the basic steps in that guide but just do it for 4.1 and 3GS. You can get a 4.1 firmware from the downloads section at the top of the page. You dont want to go to 4.2.1 as that may be a tethered jailbreak for you so 4.1 is better. Just download the 4.1 firmware for 3GS, point redsnow to it then just choose the ipad baseband box and install cydia (if you dont already have cydia on there).
I have tried doing this but when trying to put the phone in to DFU mode, the screen cuts off very early when holding both the power button and the home button. I have trieda few times but to no avail, is this a common problem?
After the Jailbreak... I had left the phone for 5 mins to do it's thing and came back to it stuck on the apple logo with a frozen spinning wheel. I have since tried hard resetting a few times and the wheel starts spinning for a minute or so before stopping and freezing!
ya libusb does not work well on vista. It can mess with your usb devices like keyboard and mouse if not installed correctly. I found that out the hard way too once and had to do a system restore to a point before I installed libusb.