Just wanted to update on this - yesterday i bought this $ 15.oo sim unlock posted by 'rahashya' (BTW, thank you sathi) from ebay. Within 5-6 hours they send me email saying my Iphone was unlocked. Then I just followed backup & restore process in my Itunes, and the Iphone 4 was unlocked. I cut my wife T-mobile sim and its working like charm.
While cutting sim from t-mobile, make sure it has same amount of side spaces in the sim like AT&T. my first attempt didn't work, second time it work. I am getting another one for this.