Jailbreak Your iPhone - Insert the old AT&T SIM card and turn off 3G under settings. Using your iPhone4 (connected to Wi-Fi network) browse to jailbreakme.com on the phone and follow the instructions. Once the iPhone is jailbroken, you can move on to further steps. If you can’t “slide to jailbreak” you may need to factory reset your phone using iTunes. (See video below)
Update Cydia & Install Ultrasn02 - There will be a new application on your iPhone Cydia (directory of applications), open it and allow it to upgrade itself if is needed. Search for the app ultrasn0w and install ultrasn0w. Once it is installed, you will be prompted to reboot the phone.