Some clever hackers have come up with a new way to jailbreak your iPhone 3GS, called the iDongle. The iDongle is a hardware jailbreak for you iPhone and it will work with the iPhone OS 3.1 or later.
It just plugs into the 30 pin connector on the bottom of your iPhone, and according to the guys who made it they will be updating the software for future releases of the iPhone OS.
The iDongle can be updated by plugging it into a USB port. One thing though whilst it will jailbreak you iPhone it wont unlock it from your network provider. You can find out more details here.
via TFTS
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