Well I asked if you owned a mac to see what software to suggest... aparrently you people aren't really too up on the whole iPhone/iPod Touch scene
...
For the iPhone/iPod Touch firmware version 2.0 (1.2) there are currently 2 ways to jailbreak/unlock a first gen iPhone. Both are made possible by the iPhone Dev-Team.
Route 1:
WinPwn
Route 2:
QuickPwn
Both have their advantages and disadvantages, but as far as a first gen phone goes, unless you want to resize your apple OS partition to greater than 500 MB, I would say that QuickPwn is probably the best method for you.
To get QuickPwn:
http://xs1.iphwn.org/releases/QuickPwnGUI120.zip
One note though, to use QuickPwn, you have to upgrade to the latest version of the iPhone firmware (2.0.2). The other thing is that when you upgrade, all your data is essentially going to be lost (nature of the upgrade from 1.x to 2.x). So if you want to backup your music that you don't have on your computer anymore I would suggest a program called CopyTrans. So far I have yet to come across free alternatives for backing up the music library for the iPod Touch/iPhone.
One final note is that, for future reference, for people who own a second generation iPhone (iPhone 3G), if you want to be able to unlock your phone one day, QuickPwn is not the method for you since this firmware introduces a new baseband, as far as unlocking your phone goes, a jailbreak can be reversed, but a baseband update cannot be (so far), so when it comes time for unlocking (if or when it does come that is), you might run into problems. So, if you aren't on
2.0.1 yet and want to upgrade to the latest firmware and jailbreak it, then you are better of going through WinPwn and going through the advanced options and having it not install the latest baseband update.
iPod Touch owners have it easy, they don't have to worry about anything to do with basebands and so on. Since all they are concerned about is Jailbreak.
As far as tutorials go, there really is no need for them. The way the software is made, it is self explanatory, and it really will walk you through ever step of the way. If you think that your phone is stuck because you see the spinner, it really isn't, just let it be and let it take its time.
Hope this clears up any confusion on how/what to do to upgrade / jailbreak an iPhone / iPod Touch.