Ultrasn0w 1.2.5 Unlocks:
If your iPhone 4 or iPhone 3GS running on one of the basebands mentioned above, then continue reading.
How To Unlock iPhone 4 / 3GS On iOS 5.0.1 With Ultrasn0w 1.2.5
STEP 1: You’ll need to jailbreak your iPhone 4 or iPhone 3GS running iOS 5.0.1 using Redns0w with our guide posted here.
STEP 2: Once jailbroken, head to Cydia -> Manage -> Sources.
STEP 3: Now tap on Edit -> Add then write down the following repo: http://repo666.ultrasn0w.com.
STEP 4: After adding the repo, search in Cydia for Ultrans0w and you’ll tap on it then hit install on the top right of screen.
After a respring and tethered boot, you’ll get your iPhone 4 and iPhone 3GS unlocked.
Let us know in case you need any help.