Finally ultrasn0w 1.0 -1 is here to unlock the iPhone 4. It can unlock iPhone 4 baseband 0.1.59.00 on iOS 4.0 and iOS 4.0.1. Here is the step by step procedure (guide) for unlocking process.
Step 1: First of all you will have to jailbreak your iPhone 4 with JailbreakMe 2.0. The complete instructions are posted here.
Step 2: After jailbreak, run Cydia, search for “ultrasn0w”, download and install it. If you don’t find, add the source. Open Cydia, tap the manage button on the bottom, tap on Sources, click on Edit button of top and then tap Add.
Step 3: Now type this repo address in the sources: http://repo666.ultrasn0w.com (It is zero in ultrasn0w and not O).
Step 4: Tap on Add Source and wait for it to update.
Step 5: Now search for ultrasn0w via search field, tap it and press Install at the top right.
Step 6: Reboot your iPhone 4 and use any carrier on iOS 4.0.1/4.0.
Disclaimer: This guide is for testing & educational purposes only. I’m not responsible for any loss of important data or malfunctioning of your iPhone.