I will be honest, I inherited a 3GS as my first apple product, and am thrilled to finally have a smartphone, but am a complete dunce when it comes to jailbreaking and unlocking, but I've been reading as much as I can and seem to have the following:
- I am a "lucky one" with a S/N < xx827 and 4.08 bootloader, which seems to indicate that I can downgrade from my 05.14.02 firmware to allow me to unlock
- My phone is not jailbroken

I have read multiple pages about how to jailbreak 4.1 phones, but they all seem to warn that doing so while having the old baseband will kill the possibility to unlock later without taking other precautions.

Since I have 4.1 and new, but downgradable (using Fuzzyband, once Cydia is installed) 05.14.02 firmware, my dilemma is what to do in which order, using which programs that can allow me to jailbreak, downgrade, and unlock.


Can someone help?

You have mis-understood.
There is no way to downgrade your BB (currently 05.14.02) so you can't unlock.
As you have the old BL you *could* upgrade your BB to the iPad BB (06.15.00) which will enable you to unlock but you WILL lose your GPS and there is no guarantee of compatability with future FW upgrades - the new BL 3GS does not work with iOS 5.xx