What Is Unlocking and Jailbreaking? Jailbreaking allows the iphone accept 3rd Party applications and games that you can't get from the Apple App Store. You get a whole new app store with a jailbreak. The name of the "jailbroken app store" is Cydia. About 80% of the apps, games, and themes in Cydia are free. Cydia is the jailbreak basically because it is the source to get all these great apps that Apple doesn't offer. Unlocking allows you to use nearly any sim card, such as T-Mobile here in the U.S. 
Jailbreak Released For 4.0 and iPhone 4 Comex has released one hell of a jailbreak for iPhone 4 and all devices on 4.0 or 4.0.1. Jailbreakme.com was a website used on 1.1.1 back in the day to jailbreak your iPhone 2G. All you had to do was visit the site and follow the instructions and you would be jailbroken within minutes. Comex has revived JailbreakMe.com and updated it for the new devices. Visit the site and perform one step to jailbreak and download Cydia. No need to reboot or restart your iPhone. This jailbreak works for iPad too on 3.2.1. When you open Cydia for the first time you will be asked if you want to save your ECID SHSH blobs and "make life easier". YOU SHOULD CHOOSE THIS OPTION. This ensures you can always downgrade your idevice and jailbreak it again.
Jailbreaking Finally Officially Legal This is a wild one, and we’re still parsing through the announcement, but on the surface it looks like the Library of Congress has added new anti-circumvention exceptions to the DMCA that, among other things, allow people to tweak their handsets for the purpose of installing legally obtained software — known as jailbreaking in iOS land, and rooting in the Android / webOS world. Other Exemptions:
— allow owners of used cell phones to break access controls on their phones in order to switch wireless carriers.
— allow people to break technical protections on video games to investigate or correct security flaws.
— allow college professors, film students and documentary filmmakers to break copy-protection measures on DVDs so they can embed clips for educational purposes, criticism, commentary and noncommercial videos.
— allow computer owners to bypass the need for external security devices called dongles if the dongle no longer works and cannot be replaced.
Saurik demonstrates A Jailbroken iPhone 4 Watch the video below, in which saurik is demonstrating a jailbroken iPhone 4. Saurik explains the current status on the new jailbreak tool, Spirit by comex. Then, saurik also demonstrates Cydia on the iPhone 4 and showing how fast it loads. At the end, a Question/Answer Session occurs.
Enjoy the Video! 
Tethering App Disguised As Flashlight Makes It In App Store Briefly You may ask yourself, why on earth would anyone pay 99 cents for an iPhone app whose sole purpose is to flash bright, solid colors? We certainly wouldn't recommend it, but Handy Light has a great little Easter egg that undoubtedly doesn't jive with the folks at Cupertino HQ. Like Nullriver's Netshare app before it, this little piece of software allows for SOCKS proxy tethering, without having to sign up for AT&T's tethering plan. Instructions available via the video below, and if you're looking to pick up the app yourself, better hurry -- we can't imagine Apple will let this one stay in the store for very much longer.
Update: Looks like the app's been pulled. Ye who snoozes, ergo must lose. If you did manage to nab and the video below isn't working (we see it just fine), check out App Shopper for more detailed, text-based instructions.
[via Engadget]
Update: Instructions from AppShopper below...
1. Set up an ad hoc Wi-Fi network on your computer (network name and password requirement are not important).
2. Connect to the Wi-Fi network you just created on your iPhone through the Settings/Wi-Fi menu.
3. Tap on the blue arrow to the right of the selected Wi-Fi network, click Static in the IP Address menu and enter the following IP address and chuckle at its geek quotient: 13.37.13.37
4. Next, enter 255.255.255.0 in the Subnet Mask field.
5. Back out of the Settings menu to ensure these settings are saved (though hitting the Home button right away shouldn’t change them).
6. Go to your Mac or PC and change the network settings to use the SOCKS Proxy and enter 13.37.13.37 as the Socks Proxy Server address and 1337 as the port. On our Mac laptop, this is what the resulting screen looks like:
7. Be sure to apply/save these settings.
8. Go back to your iPhone and open the Handy Light app and tap the flashlight colors at the bottom in the following sequence: blue, yellow, red. Then tap the top right corner of the screen and the color should change to purple. Your iPhone is now capable of sharing its internet connection with the computer you set up.
9. Leave the app open and go to your computer and start browsing. As the video describes, we found that it took a few seconds for the connection to kick in but then it worked like a charm. Though many variables affect network speed tests, a quick test using Speedtest.net yielded 3.92 Mb/s down and 0.38 Mb/s up while tethered to our iPhone 4 through Handy Light.
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