This is what i would do!
1st remove that piggy sim and just insert you tmobile or whatever sim.
2. Restore iphone with Fw 3.0.1 Found here
http://appldnld.apple.com.edgesuite....0_Restore.ipsw
3. run redsn0w 0.8 download from dev team website or you might find it here on the forum.
4.after that if you really really want to go to 3.1.2 than you will need a mac to do a costume Fw without the baseband update.
you could find this Costume update on torrent websites but if it was me i would just stick with 3.0 right now.
than just install ultrasnow as described by superman and you should be good to go.
remember back up everything you have saved on the phone.