So your wife reloaded/recovered your unlocked iPhone 3G through iTunes and now you’ve got the unbreakable 05.11.07 baseband firmware on OS 3.1.2 preventing you from using your iPhone? There’s a hack for that.
If you’re stuck in recovery mode before/after doing this, try using redsn0w with iPhone IPSW 3.0 to “jailbreak” the device. You’ll need an AT&T SIM card to complete the operation. 3.1.2/5.11.07 is permanent, so 3.0 will not actually reload onto your device, but using this operation will get you back to the Springboard.