Well I used redsn0w and then ultrasn0w to jailbreak and unlock my iPhone I recently bought second hand.

When I use my Virgin SIM card whenever I try to make a call it comes up with "Call Forwarding Active" and the dismiss prompt goes away after about 5-10 seconds. I cant send texts, receive texts or calls; but everything else works fine (it is an iTouch at the moment really). It comes up with Virgin in the top left and I get signal. (I am not that bothered that it doesn't work on Virgin as I am changing to either O2 or Vodafone soon. Someone in the IRC said that my IPCC is wrong but I cannot get it for my provider so meh.)

I put my mates Vodafone SIM card in there and after the "No Service" message in the top left goes, there are bars that are just flat. It doesn't say Vodafone at all etc. It looks like it doesn't recognise the SIM card at all. I did not restart the phone as I did not have time. Apparently this is what happened the other day when my mate tried to unlock it to O2 for me; but he got it working on Orange (but I used my bro's Orange SIM today and it got signal but I restarted before trying it, then it wouldn't pick up the service again).

It is on firmware 3.0.1 and I am from the UK.

Does this mean the phone may be stolen or something I hope not as I paid a lot of money for it.

I'm having the same problem you have with Virgin but with Vodafone Spain.My phone it isn't stolen, so I think is a problem with ultrasn0w and latest version of iPhone bootloaders (5.09 6.02 or 6.04, you can view it with fuzzyband),or maybe the official carrier (Movistar Spain) have blacklisted the IMEI for others carriers,strange thing is that the Iphone works perfect in Orange Spain.
Some people is having the same issue with t-mobile UK(can't call out etc) and working ok in Orange UK.