I have unlocked my iphone and when tried to upgrade it, i got an error, so i restored it.But i was not able to activate my iphone 3gs now...it is showing a message like ' sim card not found'..please help me with this regard

Try popping out the SIM card and turn off the phone.

Pop in the SIM card once again and turn on the phone, make sure that the SIM card is placed and seated perfectly in the tray! 🙂

Tell me how did you unlock your phone!?

It sounds like your phone was software unlocked, or hacked, to use any carrier. Updating it removed the hack reloaded the Apple specs for that phone to it's original carrier. You will need to contact the carrier it is locked to and see if you qualify for unlocking.

How exactly, did you "unlock" your phone? If it was not unlocked by the carrier it was locked to, you hacked it.

You have most likely now bricked it.

Hacked and jailbroken phones can not be discussed here.