Jailbreak and Unlock iphone 3G 16G

[hometea]

Well, I have been looking around these days for solution to upgrade my iphone to3.1.2, I feel this is the right forum to ask. I have to admit when it comes to Jailbreaking and unlocking Iphone, I no ideas at all.
Descrip:
Iphone 3g, 16Gb
Version 2.1(5F136)
Modem Firmware 02.11.07
Whether it was jailedbreak before, i have no idea since my bro gave it to me. I notice my iphone has a small plastic chip underneath the sim card. And notice some other iphone doesn't come with that. I presume my iphone is not yet unlocked, right?
Then I am concerned about my contact. How do i back-up before jailbreak and unlock, any program or using itune? Because those contacts are valuable to me.
I'm living outside of US.

Thank you very much.

 

[Skywalker]

If you have all your contacts sync to a desktop utility like Outlook you will be able to sync them back to the phone when you set up as new. If not, take a look at this lync and get to knoe Chronus.

iClarified - iPhone - How to Backup Your iPhone With Chronus

Go to this Geohot's blog to get more info on a clean jalibreak and unlock.

Here: On the iPhone

 

[hometea]

Well, it seems i got passed the jailbreak and unlock successfully. One thing remain though, I can't sync games and applications to my iphone. I remember that iphone need at least one genuine application in the machine in order for it to sync, is this true?