DevTeam just released PwnageTool 3.1.4. It allows users to jailbreak firmware 3.1.2 on iPhone 2G/3G/3GS and iPod Touch 1G/2G. It also supports OTB iPhone 3GS with firmware 3.1.x. We remind you that if you need unlock, do not update on regular 3.1.x firmware, use Pwnagetool to create custom firmware to preserve old baseband.

Here is a quick howto:

• Factory Unlocked iPhone 3G and iPhone 3GS: You do not need unlock, just use PwnageTool to create an ipsw and then use this to update and jailbreak your phone.
• iPhone 3G and iPhone 3GS: if you need unlock, use PwnageTool to create a custom firmware with an old baseband. Then update using created custom firmware and install ultrasw0w via Cydia to unlock.
• iPhone 2G: Use PwnageTool to do the magic and then restore with iTunes using your newly created .ipsw.The baseband will be unlocked, the phone jailbroken.
• iPod Touch 1G: Use PwnageTool to create a firmware image and restore with that .ipsw using iTunes.
  
• iPod Touch 2G: You must already be jailbroken in order to use PwnageTool. If so, create a firmware image and restore with that .ipsw using iTunes.
• iPod Touch 3G: No support yet.

You can download PwnageTool 3.1.4 here ^[1].

There is only a MAC version of PwnageTool. DevTeam doesn't plan to create Windows version.