The new Snowbreeze software update ie v1.7 is a better version with powerful features and additional options where in you can Jailbreak iPhone 3GS devices with new bootrom though which are upgraded upto 3.1.2 OS. Do make a note that if your iPhone is upgraded to the latest iOS4 or 3.1.3 OS and is a 3GS device then you still have to wait for the next release of the jailbreaking tools because this version supports upto 3.1.2 New BootRom only. For the latest devices read this article on Jailbreak iPhone 3G 3GS New Bootrom iOS4 or 3.1.3
To get started download a copy a copy of Sn0wbreeze from this website and install it on your computer. Next run the sn0wbreeze application from the computer which will initially display you a warning as shown below. Snowbreeze – V1.7 for 4.0 (8A293)
Select a Mode of creating the custom .ipsw file for the Restoring of your Device. The next process is completely similar to what we had earlier written for Jailbreak Apple iPhone 3.1.3. Always try to select all the options carefully because any mistake can lead to restarting the whole procedure again or else a bricked device.
Before you start any of these processes you need to Check if iPhone can be Unlocked or Jailbroken and also learn how to enter the iPhone into DFU Mode and also read our another article which can come in use if the iPhone Restore Mode Loop has been activated.