I bought this phone off of ebay, and it's already jailbroken - it has Cydia and Installer on the phone along with other 3rd party apps. I'm a T-Mobile customer and want to use the phone with my T-Mobile SIM.

First, in installed the Yellowsn0w app 0.98 via Cydia per the instructions, but it's not working. When I restart with my T-Mobile SIM in the phone, I get the error message "Different SIM detected. Please connect to iTunes." And it only allows emergency calls.

I've re-installed yellowsn0w more than once with the same results. Can someone give me some direction on fixing this and getting the phone properly unlocked??

Try starting over from the beginning.
Requirements:
2.2 firmware which can be downloaded from anywhere just google it.
quickpawn or pawnagetool

1. Restore using itunes (use the DFU mode and press and hold shift to go to the 2.2 firmware on your computer and not the new update).
2. Use quickpawn if your on a pc or pawnage tool if your on a mac to jailbreak it.
3. Go to cydia ignore the updates and go to features to install sbsettings.
4. Go back to cydia and add yellowsn0w.com to your sources.
5. Install yellowsnow.
6. Turn off 3G, edge, and wifi. Reboot using the feature in sbsettings,and while its rebooting put your sim inside and wait for startup.

__________________
T-Mobile USA
Ver. 2.2
Firmware 02.28.00
Unlocked yellowsn0w v0.9.4/5/6/7/8
iPhone 3G White 16gb
Incoming/Outgoing calls OK
Texting OK
Edge OK
E-mails OK

Thank You Dev-Team

i agree. you must restore it dfu-style if yellowsn0w did not work first time.

__________________
*i-Smartphone TURBOSIM Seller*
khanhpham06@yahoo.co.uk