Upgrade to version 1.1.1; it is, hands down, the easiest jailbreakable version.
Once at 1.1.1, visit
www.jailbreakme.com and scroll to the bottom. Press 'Install AppTapp. You're done! Simple, huh?
Link to Firmware 1.1.1
To upgrade, press Shift+Restore (if using Windows) or Option+Restore (if using Mac). Select the file you just downloaded, and let it upgrade. Enjoy!
- John