the 3GS has indeed been jailbroken. Use redsn0w 0.8 to do this
As for migrating your settings and such... this is a much more complex topic.
It has been documented by the devteam that for jailbroken phones the "restore from backup" setting in iTunes that allows you to restore all your settings on an iPhone from a backup can cause performance problems and drain your battery life faster. Their explanation is that apple does not test this restore from backup feature with jailbroken phones and that some settings contained in the backup of a jailbroken phone cause problems when they are restored.
Their recommendation is to always set up your iPhone as new after you restore it. Things like music, phone contacts, calendar etc are synced back anyway.
What you lose from this are
1. SMS and call history
2. saved settings from applications (both appstore and cydia)
3. general iPhone settings
If you plan things correctly and can handle digging around in the filesystem of the iPhone you can have the best of both world.
I did this recently, going from a 2G phone to a 3GS and kept my SMS and call history and the saved settings from some apps (mostly games)
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