This step by step site will guide you through jailbreaking, activating, and unlocking on any iPhone or iPod Touch. Just answer the questions and follow the directions provided.
What is nice with this guide (for 1.1.1), is that you do not even need your computer, just a working WiFi connection. If all goes well, you should be up and running within 10 minutes.
Connect your iPhone or iPod Touch into itunes. What is the version of your iPhone or iPod Touch, right now?