The relevant information about activation is that when an iPhone is booted up for the first time or freshly after a full restore, the phone's serial number and IMEI are checked against a database in Apple to make sure it's allowed to work with that SIM card inserted (this also activates push notifications to the iPhone). Apple intends for locked iPhones to only activate when a SIM card from the providing carrier is inserted - this doesn't have to be the iPhone's original SIM card and it doesn't have to be a SIM with active service, it just has to be a SIM that is valid for that iPhone. Hacktivation bypasses having to insert an eligible SIM card (for example if one is not available).
Hacktivation can be performed by most jailbreak tools that break the boot chain. Userland jailbreaks such as Spirit and Star cannot hacktivate, as they require interaction with programs that can only be used post-activation.
Hacktivation can be done on an iPhone 4, iPhone 3GS, iPhone 3G, and original iPhone, because they all have bootrom exploits available. There is no way to hacktivate an iPhone 4S, 5, 5s, or 5c, because they do not have bootrom exploits available.
A hacktivated device has some downsides: push notifications, iMessage, and FaceTime don't work. The device also drains some battery and data while it tries to look for the certificates that allow a normal device to use those services.
- Using redsn0w and not selecting any of the options. (This will work on any iPhone compatible with that version of redsn0w, but not on devices with A5+ chips.)
- If the iPhone is on 3.1 or 3.1.2, you can use blackra1n. (If you have an iPhone 3GS with the new bootrom it will be tethered.)
- Restore using a custom IPSW.
Properly activating a hacktivated device
Ways to "un-hacktivate" a device, or in other words, properly activate it:
Official activation using redsn0w: Insert a valid SIM card from the phone's official carrier. Then open redsn0w, click "Jailbreak", and click the "deactivate" checkbox that will be presented during the jailbreaking process. Open up iTunes, and it should properly activate the phone. You can then remove that SIM card.
Official activation using SAM: This is similar to the redsn0w method above - obtain a valid SIM from the phone's official carrier, and put that SIM in your phone. Add the repository http://repo.bingner.com/ to Cydia, install SAM (Subscriber Artificial Module), choose "Revert Lockdownd to Stock", and choose "deactivate". Then plug the device into your computer, open iTunes, and it should properly activate your phone. You can then remove that SIM card.
Simulated activation using SAM: This method does not require having an official SIM card. You can use SAM (Subscriber Artificial Module) to obtain correct activation certificates for a phone, because SAM simulates an official SIM card ID (ICCID) and IMSI. See "How to use SAM to get proper activation of my iPhone?" for instructions.