Step 1: Download iPhone OS 4 Beta for iPhone 3G.
Step 2: Update to this latest firmware file: iPhone1,2_4.0_8A230m_Restore.ipsw
Step 3: Start redsn0w 0.9.5 and point it to the original iPhone OS 4 Beta firmware for iPhone 3G to proceed.
Step 4: Now select “Install Cydia” and click “Next”.
Step 5: Now make sure your device is both OFF and PLUGGED IN to the computer before you click “Next”.
Step 6: Connect your device in recovery mode by pressing the Power and buttons continuously. Follow instructions in RedSnow until installation begins.
Step 7: Redsn0w will do the rest for you. Your iPhone 3G will restart automatically and you will find it jailbroken with iPhone firmware version 4.0.

You will now notice that Cydia has a blank white icon. Go to the Sources panel and add http://apt.saurik.com/cydia-3.7 repo. Now restart your phone and you should see the regular standard Cydia logo now.

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