The Inquirer reports a Croatian hacker called Sassha has hacked the Apple iPhone and is managed to use it on the T-Mobile network in Croatia.
After the unlock, the phone uses regular GSM or EDGE network for cellphone connectivity, or Wi-Fi connection point when EDGE connection is not available. However, there is just one small fallback - YouTube does not work. Given the limited number of results that you get on YouTube anyways, this does not seem to be a great loss.
The funniest thing of them all is the fact that you have to use iTunes to activate the iPhone, while that service is not available in Croatia at all. This is due to the fact that Europeans have more strict regs about interoperability and that Apple Croatia has other things on its mind in August.