First of all you need to have a PC running XP or 2k as ME and 98 are not compatable due to lack of USB support.
Next you need the SIMunlockV2 app from HERE
1. Pressing ctrl-alt-del on the pc select Task Manager.
2. In taskmanager terminate the process called wcescomm.exe
3. switch of the phone, then switch it on holding the power and record button, after about a minute or so you will see a 3 coloured screen.
4. Connect cradle to pc and insert phone into cradle.
5. Run the sinunlockv_2 app
6. write down the code obtained from the unlock program
7. restart phone with sim card from another network (IE not the network you normally use Orange etc)
8. Enter code when prompted.
9. restart pc
(thanks squall for jogging my memory