Works on T-mobile USA Iphone 2g 3.0 software.
Im not sure exactly what i did becuz i did just about everything stated here downgrading and upgrading and installing from apple and installing from an ispw from demonoid.... it was very confusing but it DOES work on T-mobile 2g with the 3.0 software. Thank you baby Jesus!
UPDATE
And as far as tethering goes for T-Mobile
Ive looked everywhere for tmobile USA carrier settings but couldnt find any. Instead of using the bult in tether you can also download from cydia PDANet or Tether, pdanet is easier to configure. So it is possible for us Tmobile 2g owners!
Update No.2
Youtube works for me just fine on Edge my WIFI is turned off and its working. So youtube, maps, Edge, Tmobile Iphone 2g 3.0 software, and tethering through PDAnet all work. Its possible!