The current IOS 5.0 firmware makes an update to the iPhone 4 baseband. This new baseband version, 04.11.08, blocks the Rebel Micro Unlock Simcards and we are looking in this and can take some time.
If, like many others you have updated to IOS 5.0 and find you are not able to unlock this new baseband 04.11.08. You may also want to be able to restore back to a previously unlock able 04.10.01 baseband on your iPhone on the 4.3.5 iOS firmware. For now it is possible to downgrade the baseband to 04.10.01 by downgrading back to 4.3.5 firmware using the restore process.
IMPORTANT NOTE - This method will only work whilst Apple is still signing the 4.3.5 firmware and its associated 04.10.01 baseband. Do hurry up as Apple can close the 4.3.5 signing window any time and then this method will cease to work.
1. Download the 4.3.5 firmware from our sticky here - Official Apple IOS 4.3.5 Firmware Download Link for iPhone 4
2. Connect your iPhone to your PC or MAC and put it into DFU mode. We have a guide here if you need assistance
4. Open iTunes, which will recognise your iPhone in recovery mode, acknowledge the message about this, then press shift and keep press on the keyboard and on the screen with the mouse button press restore (Windows) or option-restore (OSX), and select the 4.3.5 firmware you downloaded in step 1.
5. If you followed the instructions, the restore to 4.3.5 should now complete without any errors. When it is complete you will have a stock 4.3.5 iPhone 4 again with a downgraded 04.10.01 baseband.
Remember, the baseband cannot normally be downgraded, however because Apple are signing the firmwares, and their associated basebands, it is possible, but only until normally after a week of the official release of 5.0.