Finally as with the previous Apple iPhones, the iPhone 3GS has also been Jail-broken/Hacked. Jail-breaking means modifying the Apple iPhone Firmware to allow installation of 3rd Party Applications, Themes and also Unlocks the phone making it suitable to be used on any network.
The software is called PurpleRa1n and is made by Geohot and works on iPhone running the 3.0 OS and not 3.1 OS which is going to be released soon as an update. So remember not to update to the new version if you wish to jailbreak your iPhone otherwise you will have to wait for some more time to jailbreak it.
The Jail-breaking is now currently possible only on a Windows PC. the MAC version will be released soon too.