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WARNING : YOU DO THIS AT YOUR OWN RISK

They took an exploit that was closed by Apple in the iPhone baseband, but still active in the iPad 3G baseband; they also tweaked redsn0w , and by using the latest release , basically you transfer the iPad’s baseband ( version 06.15.00 ) into your iPhone – baseband which can be unlocked.

You Need: 
Redsn0w 0.9.6b5 for Mac or Windows  

Run redsn0w, and click on browse. Browse Frimware iOS 4.2.1 and open it


Wait for redsn0w to recognize it and click Next


Preparing Jailbreak Data 


IF you only need to restore with a custom firmware, deselect everything, and select only Just enter pwned DFU mode right now .In this case you will want to select.

 


Install iPad baseband When you select it you will get a warning that tells you the risk of this process.


redsn0w will ask you to turn your device off. If it’s not already off plug it in FIRST and then turn it off Click next to continue.
Now you will need to put your device in DFU mode


Wait a few seconds for redsn0w to do its thing.

 

Load Cydia & add this Source : http://repo666.ultrasn0w.com
 

Now Install ultrasn0w 1.2

 
Restart You Iphone All done :)